Suppose the price elasticity of supply for cheese is 0.6 in the short run and 1.4 in the long run. If an increase in the demand for cheese causes the price of cheese to increase by 15%, then the quantity supplied of cheese will increase by
a. 0.4% in the short run and 4.6% in the long run.
b. 1.7% in the short run and 0.7% in the long run.
c. 9% in the short run and 21% in the long run.
d. 25% in the short run and 10.7% in the long run.
c
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According to the life-cycle hypothesis ________
A) households consume on the basis of their current income and liabilities B) household consumption as a percentage of income varies over one's lifetime C) current income is a function of future income D) cycling to work everyday allows one to live a longer life
A dominant strategy is a strategy that a player should take only if the other player cheats.
a. true b. false
Price discrimination refers to:
a. charging different prices to different groups on the basis of production cost differences. b. charging different prices to different groups without a basis for doing so because of differences in production costs. c. the ability of a firm to charge a price in excess of marginal cost. d. consumer bargain hunting.
If coal mining produces a negative externality because it leads to environmental damage, then, at the market equilibrium, the:
A. quantity of coal produced will be greater than the socially optimal quantity. B. quantity of coal produced will be less than the socially optimal quantity. C. supply curve will lie to the left of the regulated supply curve. D. price of coal will be higher than the socially optimal price.