The _____________________ is the effect of a change in the price of an input on the firm's relative use of the input to produce a given level of output
Fill in the blank(s) with the appropriate word(s).
Ans: input substitution effect
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If the average cost curve for an individual firm is decreasing when it intersects the market demand curve, why is a natural monopoly likely to develop in this market? Explain
What will be an ideal response?
Which of the following is a short run adjustment? a. A bakery hiring two additional bakers
b. Two new firms enter the textile industry. c. Three firms leave the bicycle industry. d. A computer hardware company builds a new factory.
As a result of a kinked demand curve, the price:
A. fluctuates. B. falls below the kink. C. settles at the kink. D. rises above the kink.
Specialization occurs because
A. people have different skills. B. society trades current consumption for future consumption. C. society produces at the production possibilities curve. D. the production possibilities curve tends to be linear.