Differentiate between the short run and the long run.
What will be an ideal response?
The short run is a period of time during which some of the firm’s cost commitments will not have ended. In the short run, firms have relatively little opportunity to change production processes so as to adopt the most efficient way of producing their current outputs, because plant sizes and other input quantities have largely been predetermined by past decisions.
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Jaycee Jeans sold 40 pairs of jeans at a price of $40. When it lowered its price to $20, the quantity sold increased to 60 pairs. Calculate the absolute value of the price elasticity of demand. Use the midpoint formula
A) 1.67 B) 1.0 C) 0.6 D) 0.53
If resale price maintenance leads to a shift in the market demand that exceeds the shift in the market supply, the quantity of the good sold will ________ and the manufacturer's profit will ________.
A) decrease; decrease B) decrease; increase C) increase; increase D) increase; decrease
An example of opportunity cost:
a. is the Chinese food that you gave up when you chose to eat Italian food. b. is the tuition that you pay to attend college. c. for a professor of economics is the pleasure that he or she derives from teaching economics. d. is sweets given up by a person who would never eat them even if he or she could. e. is the amount spent on buying movie tickets.
If the market power of a labor union enables it to offset the market power of an oligopolistic firm, this is called
a. monopolistic competition b. cartel pricing c. price discrimination d. contestable markets e. countervailing power