State the law of supply and explain it
What will be an ideal response?
The law of supply indicates the direct or positive relationship between price and quantity supplied. This law states that when the price of a good increases, sellers will make more of that good available for a specified period of time, other things being equal. Other things being equal, a higher price gives producers more incentive to produce and sell more of that product. Conversely, when the price of a good decreases, sellers will make less of that good available for a specified time period.
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An example of a government-imposed barrier to entry gives a firm the exclusive right to a new product for a period of 20 years from the date the product is invented. This entry barrier is known as
A) a copyright. B) an exclusive marketing agreement. C) a patent. D) a tariff.
Mac trucks and their dealers would likely have an organizational form of
a. fixed profit sharing franchise contracts b. spot market recontracting c. alliances d. vertical integration
If the four-firm concentration ratio in an industry increases, the industry
A. must have become more competitive. B. must have become a monopoly. C. must have become less competitive, although not necessarily a monopoly. D. may or may not have become less competitive.
Suppose a record company produces both swing and rhythm & blues music. An increase in the market demand for swing music therefore tends to
A) increase the demand for rhythm & blues music. B) increase the cost of producing rhythm & blues music. C) decrease the cost of producing rhythm & blues music. D) leave the cost of producing swing music unchanged.