As new firms enter and output expands in an increasing-cost industry, the increase in ______ for inputs causes the cost curves of all firms to shift ______.
a. demand; upward
b. demand; downward
c. supply; upward
d. supply; downward
a. demand; upward
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Why is the price elasticity of demand generally a negative number?
What will be an ideal response?
A firm that has market power
A) can charge whatever it wants for its product. B) can charge a price above marginal cost. C) has positive economic profits. D) does not lose sales when increasing price.
When the price of sausages is $2.00 per pound, consumers buy 50 pounds of hamburger. When the price of sausages rises to $3.00 per pound, 60 pounds of hamburger are purchased
The cross price elasticity of demand between sausages and hamburger is approximately equal to A) +0.04. B) -0.45. C) +2.20. D) +0.45.
For a monopolist, at the profit-maximizing level of output:
A. price is greater than marginal revenue. B. marginal revenue is greater than average revenue. C. average revenue is greater than price. D. price is equal to marginal revenue.