Explain the difference between the immediate market period, the short run, and the long run as they relate to price elasticity of supply
Please provide the best answer for the statement.
The price elasticity of supply depends primarily on the ease of substitution of resources between alternative uses, which is often affected by time. In the immediate market period, there is too little time for producers to change output in response to a change in price. As a consequence supply is perfectly inelastic. Graphically, this means that the supply curve is vertical at that market level of output. In the short run, producers have less flexibility to change output in response to a change in price because they have fixed inputs that they cannot change. They have only limited control over the range in which they can vary their output. As a consequence, supply is price inelastic in the short run. In the long run, producers can make adjustments to all inputs to vary production. As a consequence, supply is price elastic in the long run.
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Gross domestic product does not measure
A) the sum of the value added by producers at each stage of the production process. B) the total income received by producers for the services they supply. C) the total purchases of newly-produced final goods. D) the total welfare of the noninstitutional population.
In a progressive tax? system,
A. the marginal tax rate increase as income increases but the average tax rate does not change as income increases. B. the marginal tax rate and the average tax rate decrease as income levels increase and the marginal tax rate is less than the average tax rate. C. the marginal tax rate and the average tax rate are the same for every income level and the same as income increases. D. the marginal tax rate and the average tax rate increase as income levels increase and the marginal tax rate exceeds the average tax rate.
The study of inflation is part of:
a. Macroeconomics b. Microeconomics c. Urban economics d. Home economics
Which of the following statements is INCORRECT regarding the properties of information products?
A) Providing an information product entails incurring relatively high fixed costs. B) The average total cost curve for a firm that sells an information product slopes upward. C) The firm experiences economies of operation in the short run. D) In the long run, the producer earns sufficient revenue to cover the opportunity cost of capital.