Suppose the cost of raw materials used by the cotton industry rises to a larger extent compared to the increase in demand in the market. Which of the following situations will arise?
a. The incidence of the higher cost will fall completely on the consumers.
b. The incidence of the higher cost will fall completely on the high cost firms.
c. The incidence of the higher cost will fall completely on the low cost firms.
d. The incidence of the higher cost will fall partially on the consumers and partially on the sellers.
D
You might also like to view...
How do we graph a relationship among more than two variables?
What will be an ideal response?
Changing the units of measurement, e.g. measuring testscores in 100s, will do all of the following EXCEPT for changing the
A) residuals B) numerical value of the slope estimate C) interpretation of the effect that a change in X has on the change in Y D) numerical value of the intercept
The product supplied by a monopoly firm has
a. a few substitutes. b. no close substitutes. c. a large number of substitutes. d. two or three close substitutes.
The water and diamonds paradox can be explained by considering:
(a) Marginal Utility. (b) The difference between inferior and luxury goods. (c) Long run costs. (d) It cannot be explained.