Suppose cookie sales fall as consumers become more carbohydrate-conscious. If the cookie industry is a constant-cost, perfectly competitive industry, this decline in market demand will cause market supply to:
A. increase in the long run until the equilibrium price is again equal to minimum average total cost.
B. increase in the long run, resulting in a higher equilibrium price.
C. decrease in the long run until the equilibrium price is again equal to minimum average total cost.
D. decrease in the long run, resulting in a lower equilibrium price.
Answer: C
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When there few close substitutes available for a good, demand tends to be
A) relatively elastic. B) perfectly elastic. C) relatively inelastic. D) perfectly inelastic.
One way the government decides how to pay for a public good is:
A. the transfer of surplus. B. the ease of collecting payout. C. if they can make the good excludable and charge its users. D. All of these are ways the government allocates payment of public goods.
Currently
where "s" and "a" refer to steel and aluminum, and Ps and Pa refer to the prices of steel and aluminum, and MPs and MPa refer to the marginal products of steel and aluminum, respectively, for a firm. Has the firm come up with the right amounts of steel and aluminum, or should it reallocate its resources to make the maximum profit?
What will be an ideal response?
What is the average cost pricing rule? Why is it not an efficient way of regulating monopoly?
What will be an ideal response?