Firms are not likely to include their sunk costs when calculating their true cost of supplying goods if they
A) are calculating their income for tax purposes.
B) have been accused by competitors of "dumping."
C) have been accused by customers of "price gouging."
D) must request price increases from a regulatory commission.
E) want subsidies from the government.
B
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What will be the principal and most immediate effect on the supply or demand of raw cotton grown in the United States if beef demand rises and ranchers are induced to reduce their flocks of sheep (for wool) in order to grow more cattle?
A) Decrease in demand. B) Decrease in supply. C) Increase in demand. D) Increase in supply
The above figures show the market for hamburger meat. Which figure shows the effect when more farmers decide to raise cows that are processed into hamburger meat?
A) Figure A B) Figure B C) Figure C D) Figure D
In a perfectly competitive market, firms in the long run earn zero economic profits. Why?
What will be an ideal response?
When very few substitutes for a good exist, demand will be
A) elastic. B) unit-elastic. C) inelastic. D) perfectly elastic.