For a particular good, a 3 percent increase in price causes a 10 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good?
a. The relevant time horizon is short.
b. The good is a necessity.
c. The market for the good is broadly defined.
d. There are many close substitutes for this good.
D
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Assume the production technology changes for a good that is currently produced in a perfectly competitive market
In particular, the new technology is such that the marginal costs of production for a single firm decline over the entire range of the demand curve for the good in question. How would this affect the number of firms that operate in this market? Explain.
Discuss the problems associated with the imposition of capital controls
What will be an ideal response?
Answer the following statements true (T) or false (F)
1) The meaning of product quality is dependent on the type of product. 2) Product quality is likely to be the same for a frozen pizza firm and a paper towel firm. 3) In general, consumers' valuation of additional units of quality increases as more units of quality are included in a product. 4) In general, the product quality marginal revenue curve is downward sloping and the product quality marginal cost curve is upward sloping. 5) The quality profit-maximization rule states managers should produce the level of quality that sets the marginal revenue from an additional unit of quality equal to the marginal cost of producing the additional unit of quality.
To be binding, a price floor must be set above the equilibrium price
a. True b. False Indicate whether the statement is true or false