If a single supplier produces such a small portion of the total market output that changes in its production have no impact on the overall market price: the firm will eventually be forced out of business. the firm's supply curve is perfectly inelastic. demand for the firm's output is perfectly elastic. the market supply curve is horizontal.

If a single supplier produces such a small portion of the total market output that changes in its production have no impact on the overall market price: the firm will eventually be forced out of business. the firm's supply curve is perfectly inelastic. demand for the firm's output is perfectly elastic. the market supply curve is horizontal.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter9: Market Structure And Long-run Equilibrium

Section: Chapter Questions

Problem 6MC

See similar textbooks

Similar questions

. Suppose the price elasticity of supply for a product is zero. This means that: a. There is a shortage. b. The firm makes the same amount of product even if the price changes some. c. The firm makes the same amount of revenue even if the price changes some. d. No one wants to buy the good. e. The supply curve is horizontal.
Rent controls force landlords to price apartments below the equilibrium price level. An immediate effect is a shortage (excess demand) of apartments, because the quantity of apartments demanded is greater than the quantity supplied at the regulated price. When cities prevent landlords from charging market rents, which of the following are common long-run outcomes? Check all that apply. The future supply of rental housing units increases. Efficient use of housing space results. Nonprice methods of rationing emerge. The quantity of available rental housing units falls. Step by step with explanation answer.
Assume price per unit is graphed on the vertical axis and quantity demanded is graphed on the horizontal axis. If consumers are inelastic, then a. Supply is relatively flat (almost horizontal). b. Demand is relatively flat (almost horizontal). c. Supply is relatively steep (almost vertical). d. Demand is relatively steep (almost vertical).
A new technological breakthrough increases production for an industry and shifts the supply curve to the right. If the firm ________, then the firm will likely be happy about this new technology. Question 44 options: a) produces products because the consumer will buy less b) produces products that are considered inelastic c) decreases production d) produces products that are considered elastic
The price elasticity of demand for an industry’s demand curve is equal to –1.75 for the range of prices over which supply decreases. If total industry output is expected to decrease by 14 percent as a result of the supply decrease, managers in this industry should expect the market price of the good to ________ (increase, decrease) by ________percent.
Land-use zoning that limits the amount of land for apartments generates a relatively (flat/steep) supply curve for housing, so an increase in the demand for apartments leads to a relatively (large/small) increase in price.
Supply and demand curves for an item of medical equipment are shown in the graph below. In order to compete with a new product by a rival company, the price is temporarily lowered to $20,000. What is the reduction (from equilibrium) in producer surplus that results from this artificially low price?
Rent controls force landlords to price apartments below the equilibrium price level. An immediate effect is a shortage (excess demand) of apartments, because the quantity of apartments demanded is greater than the quantity supplied at the regulated price. When cities prevent landlords from charging market rents, which of the following are common long-run outcomes? Check all that apply. - Efficient use of housing space results. - Nonprice methods of rationing emerge. - The future supply of rental housing units increases. - The quantity of available rental housing units falls.
Firm X introduces a new good A in the market. The laws of demand and supply hold for this good. The firm produces 500 units of A per month. The good does not have any close substitutes and is priced at $4 per unit. Consumers like this new product and industry analysts expect the price to rise as much as $7 before an equilibrium is reached in this market. At equilibrium, the industry analysts expect quantity demanded and supplied to be 650 units. However, Patrick Clearwater, the operations head at firm X, believes that even at a price of $7 per unit, there will still be a shortage of 100 units. Which of the following, if true, will support Patrick's view? A. There was a price ceiling at $7 which has been removed. B. Good A is an inferior good. C. Price elasticity of supply is actually lower than what is expected by the industry analysts. D. The demand for good A is highly inelastic. E. At a price of $7 per unit, the firm supplies 750 units of good A.
The price elasticity of demand increases with the length of the period considered because consumers incomes will increase over time the demand curve will shift outward as time passes all prices will increase over time consumers will be better able to find substitutes. 2 A profit-maximizing firm in the short run will expand output until marginal cost begins to rise until total revenue equals total cost until marginal cost equals average variable cost as long as marginal revenue is greater than marginal cost
A price cut will increase the total revenue a firm receives if the demand for its product is: Group of answer choices inelastic. unit elastic. elastic. unit inelastic.
Suppose product y is an input of the production of product z. Product z is in turn is a substitute in product x. An increase in the price of y can be expected to increase the demand for x decrease the demand for x have no effect on the demand for product x decrease the supply of x increase the supply of x