As market price increases in the short run, a profit-maximizing firm in a perfectly competitive market will expand output along its:
A. marginal cost curve.
B. average total cost curve.
C. average variable cost curve.
D. market demand curve.
Answer: A
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Is supply more elastic or less elastic as more time passes after a price change? Explain your answer
What will be an ideal response?
In the Village of Punjab, Sheryl owns a well, which is the only source of drinking water. The supply of water is perfectly inelastic at a quantity of 1,000 gallons of water per day
At a price of $2.00 per gallon, the quantity demanded per day is 1,000 gallons. The government imposes a $0.50 per gallon tax. a) After the tax is imposed, what is the price paid by the villagers? What is the price received by Sheryl? b) How much revenue does the government collect? c) What fraction of the tax does Sheryl pay? What fraction is paid by the villagers?
Describe the two sources of economies of scale and how these economies of scale lead to intraindustry trade
What will be an ideal response?
Average total costs are defined as
A) total costs divided by the change in output. B) total costs divided by output. C) the change in total costs when output changes. D) average variable costs plus marginal costs.