The person on the other side of a transaction is referred to as the:
A) derivator
B) counterparty
C) hedger
D) speculator
B
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A constant-cost industry
A) is one in which an increase in demand is matched by a proportional increases in long-run supply. B) generates increasing profits whenever demand increases because the new long-run equilibrium price is above the old price even though average costs have not changed. C) has a horizontal long-run supply curve. D) has a downward sloping long-run supply curve.
Suppose a 5 percent increase in price causes a 25 percent decrease in quantity demanded. Which of the following statements is most likely true? a. There are many substitutes for this good
b. There are few substitutes for this good. c. The market for the good is a necessity. d. The price change persists over a very short period of time.
The accompanying table shows a pizzeria's fixed cost and variable cost at different levels of output. Pizzas sell for $20 each.Number of Pizzas Per DayFixed Cost ($/Day)Variable Cost ($/Day)050002550015050500250755004501005008501255001,650 When the pizzeria makes 25 pizzas a day, its average fixed cost is ________.
A. $20 B. $5 C. $6 D. $10
If demand increases and supply decreases
A) the market clearing price definitely will increase, and the equilibrium quantity definitely will increase. B) the market clearing price definitely will increase, and the equilibrium quantity definitely will decrease. C) the market clearing price definitely will increase, but the change in the equilibrium quantity cannot be determined without more information. D) the equilibrium quantity definitely will decrease, but the change in the market clearing price cannot be determined without more information.