Why is the demand for an input considered a derived demand?
What will be an ideal response?
The demand for an input is dependent on the demand for the output the input can be used to produce.
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What is cost-plus pricing? Why do some firms use cost-plus pricing even when the firms' managers have the resources to devise a pricing strategy that would result in greater profits?
What will be an ideal response?
Real capital income is given by ________
A) MPK × K B) capital share of income × output per unit of capital × capital C) capital share of income × output D) all of the above E) none of the above
A firm has market power:
A. when it can profitably charge any price of its choosing. B. when it is characterized as a price taker. C. when it can profitably charge a price that is above its marginal cost. D. only when it is the sole firm producing in a market.
If you know the required reserve ratio, then you know how much each bank is holding in reserves
a. True b. False Indicate whether the statement is true or false