Exhibit 4-1 Supply and demand data
Price
Quantitydemanded
Quantitysupplied
$1.00
500
50
1.50
450
150
2.00
400
250
2.50
300
300
3.00
150
350
In Exhibit 4-1, suppose that a reduction in the price of an important input used to produce the good causes an increase in quantity supplied of 150 units at every price level. Assuming that demand does not change, the new equilibrium price will be:
A. $1.00.
B. $1.50.
C. $2.00.
D. $2.50.
Answer: C
You might also like to view...
Answer the following statements true (T) or false (F)
1) In peak-load pricing, the capacity decision is made in the short run. 2) In peak-load pricing, the capacity decision is only based on conditions during the peak period. 3) Off-peak demand influences the capacity decision in peak-load pricing. 4) The capacity decision in peak-load pricing is found by setting the peak marginal revenue equal to the long-run marginal cost. 5) In peak-load pricing, the short-run marginal cost is equal to the marginal cost of providing capacity.
Since 1981, welfare rules have shifted the focus from work requirements to work incentives
Indicate whether the statement is true or false
Assume the following exchange rates for today: $1=140 yen and 1 Danish krone = $0.10. We can conclude
A) 1 yen = 280 kr. B) 1 yen = 14 kr. C) 1 kr. = 28 yen. D) 1 kr. = 14 yen.
Which of the following is a difference between accounting profit and economic profit?
a. Accounting profit includes only the implicit costs of a firm, while economic profit includes only the explicit costs of the firm. b. Economic profit includes explicit and implicit costs of a firm, while accounting profit includes only explicit costs of the firm. c. Accounting profit is calculated for the current year, while economic profit can be calculated only for previous years. d. Accounting profit is the profit that has already been made by a firm while economic profit is the prediction of the firm's profit in future.