(g) Now assume that the market in which Dave's General Store operates is in long-run equilibrium. (i) Suppose the rent paid by Dave's General Store decreases. Will Dave's General Store's profit- maximizing quantity of Good X increase, decrease, or stay the same in the short run? Explain. (ii) Instead suppose Dave's General Store hires labor in a perfectly competitive market and the market wage increases. Will Dave's General Store's profit-maximizing quantity of Good X increase, decrease, or stay the same in the short run? Explain.
(g) Now assume that the market in which Dave's General Store operates is in long-run equilibrium. (i) Suppose the rent paid by Dave's General Store decreases. Will Dave's General Store's profit- maximizing quantity of Good X increase, decrease, or stay the same in the short run? Explain. (ii) Instead suppose Dave's General Store hires labor in a perfectly competitive market and the market wage increases. Will Dave's General Store's profit-maximizing quantity of Good X increase, decrease, or stay the same in the short run? Explain.
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter11: Price And Output Determination: Monopoly And Dominant Firms
Section: Chapter Questions
Problem 6E
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