What type of industry is the market for grocery products? Is over-capacity present?
Though there are numerous large chains, any local market could be best modeled by the competitive price-searcher apparatus. Though two or three firms may dominate, there are usually numerous smaller rivals. We may view the lack of waiting time as a proxy for over capacity. If this is the case, it would appear that most large stores are at full capacity, while such firms as the Quick Stop and Minute Saver are not. People will pay higher prices in these types of stores because they want to save time and reduce their cost of transactions.
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Suppose potential income is $60 billion, actual income is $40 billion, and expenditures don't vary with income. If the actual budget deficit is $4 billion and the marginal tax rate is 20 percent, the structural deficit:
A. is $4 billion. B. is zero. C. is between zero and $4 billion. D. cannot be determined from the given information.
If prices of a nation's exported products rise in comparison to prices paid for imports, that nation experiences a:
a. rise in its international terms of trade. b. decline in its international terms of trade. c. reduction in its imports. d. reduction in its exports.
Which of the following could start a demand-pull inflation?
A) There is an increase in the quantity of money. B) There is an increase in government expenditures. C) There is an increase in exports. D) All of the above could be initial causes of demand-pull inflation.
Boeing and Airbus have entered into a cartel agreement that will enable them to boost their profits. What occurs if Boeing decides to cheat on the agreement?
i. Boeing lowers the price of its airplanes. ii. The total industry output increases. iii. The total profits in the airplane industry will decrease. A) i only B) ii only C) iii only D) i and ii E) i, ii, and iii