As the price of flour (an input in the production of cookies) increases, firms that produce cookies will:
A. decrease the quantity of cookies supplied.
B. increase the quantity of cookies supplied.
C. decrease the supply of cookies.
D. increase the supply of cookies.
Answer: C
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During the Global Economic Crisis, the increase in the unemployment rate in Europe was
A) equal to that in the United States. B) less than that in the United States. C) greater than that in the United States. D) impossible to compare given that Europe did not experience crises.
Supply curves for secondary supply resources (e.g., scrap metal) become:
A) Steeper in the short run B) More elastic in the long run C) Steeper in the long run D) More inelastic in the short run
If regulation imposes marginal cost pricing on a natural monopoly, then the monopoly will:
a. suffer persistent economic losses. b. earn a fair, but not excessive, return on its assets. c. produce too little output to achieve efficiency. d. experience diseconomies of scale.
The fundamental source of monopoly power is
a. many buyers and sellers. b. low fixed costs. c. rising average total costs. d. barriers to entry.