Suppose that Big-Cat and Fat-Cat are rival cat food brands, and the price of Fat-Cat is reduced. Following this price drop, is there a shortage or a surplus of Big-Cat at the old price of Big-Cat?
a. Surplus.
b. Neither, a price drop can not cause a shortage or surplus.
c. Neither, equilibrium exists.
d. Shortage.
a
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Refer to Figure 13-4. Should the firm represented in the diagram continue to stay in business despite its losses?
A) No, it is not able to cover its fixed cost. B) Yes, it should increase its revenue by raising its price. C) Yes, its total revenue covers its variable cost. D) No, it should shut down.
Refer to Scenario 18.1. It would be acceptable to both parties to have the fishermen pay the factory
A) $0 to install a filter. B) $500 to install a filter. C) $4,000 to install a filter. D) $6,000 to install a filter. E) any amount greater than $4,000 and less than $6,000 to install the filter and make both parties better off.
The common measure of wealth used in calculating the distribution of wealth includes
A) workers' claims on the Social Security system. B) workers' claims on private pension funds. C) financial assets. D) human capital.
The costs associated with the negotiation and enforcement of an agreement are
A) property costs. B) resource factor costs. C) transaction costs. D) attorney fees.