Suppose the equilibrium price of oranges is $0.79 an orange, but government takes steps to prevent the price from exceeding $0.60 an orange. The likely result will be a:
A. shortage of oranges as the price ceiling keeps the market from reaching equilibrium.
B. higher equilibrium price for oranges as the demand curve for oranges shifts to the right.
C. lower equilibrium price for oranges as the supply curve for oranges shifts to the right.
D. surplus of oranges as the price ceiling keeps the market from reaching equilibrium.
Answer: A
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An incentive is
A) a reward or a penalty that encourages or discourages an action. B) when people make rational choices by comparing costs and benefits. C) what you must give up to get something. D) a choice is made on the margin. E) a good or service that satisfies wants.
Average costs curves initially fall
a. Due to declining average fixed costs b. Due to rising average fixed costs c. Due to rising fixed costs d. Due to rising marginal costs
Suppose that the equilibrium price of pickles falls while the equilibrium quantity rises. The most likely explanation for these changes is:
A. an increase in the supply of pickles. B. an increase in demand for pickles. C. a decrease in demand for pickles. D. a decrease in the supply of pickles.
Which statement is true?
A. The monopolistic competitor has a perfectly elastic demand curve. B. The monopolistic competitor may make a profit in the long run. C. The monopolistic competitor operates at the minimum point of her ATC curve. D. None of these statements are true.