If a product has a short-run elasticity of supply equal to zero, then an increase in the demand for the product will:
A. increase price and leave quantity sold unchanged.
B. increase price and reduce the quantity sold to zero.
C. have no effect on price or quantity sold.
D. leave the price unchanged and reduce the quantity sold.
Answer: A
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A student athlete is deciding whether to work out for an extra hour. Her marginal benefit from another hour of exercise
A) is the benefit she gets from all the hours she's worked out all week. B) is the benefit she receives from exercising the additional hour. C) is less than the marginal cost of the additional hour. D) depends on the cost of the workout.
A compensating wage differential is a wage premium paid in order to:
A) recognize a more efficient employee. B) attract workers who have a family to support. C) improve the goodwill of a firm hiring workers. D) attract workers to otherwise undesirable occupations.
In the short run, a firm that finds itself earning a loss should compare the market price to which cost in order to determine how to minimize its losses?
A. Average total costs B. Average variable costs C. Marginal costs D. Fixed costs
The assertion that "there is no free lunch" means that
A. there are always trade-offs between economic goals. B. marginal analysis is used in economic reasoning. C. rational choices do not involve excessive costs. D. all production has an opportunity cost.