In a perfectly competitive market, why do suppliers rarely charge more than the current market price?
a. The suppliers’ union would not allow the supplier to charge a higher price.
b. Buyers could easily choose another supplier.
c. Buyers often don’t have enough money to purchase a higher-priced good.
d. The suppliers’ employees would go on strike.
b. Buyers could easily choose another supplier.
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In the short run, ________ increases the quantity of labor demanded by the firm
A) a decrease in the price of the firm's output B) an increase in the prices of other factors of production used by the firm C) a technological advance that decreases the marginal product of labor D) a decrease in the wage rate
An increase in advertising costs affect a firm in a monopolistic competition by increasing the firm's
A) total fixed cost. B) marginal cost. C) total variable cost. D) average variable cost.
Refer to Table 4-13. The equations above describe the demand and supply for Aunt Maud's Premium Hand Lotion. The equilibrium price and quantity for Aunt Maud's lotion are $20 and 30 thousand units. What is the value of consumer surplus?
A) $300 thousand B) $450 thousand C) $900 thousand D) $1,500 thousand
Answer the following statements true (T) or false (F)
1. Probably the main characteristic of a demand curve is that it slopes upward from left to right. 2. Typically, the higher the price of a commodity, the greater the quantity supplied. 3. Price ceilings usually create surpluses since supply is increased. 4. Price floors can create surpluses if price floors are above market prices. 5. Price elasticity of demand is a measure of consumer responsiveness to a change in price.