The power of the supply and demand model lies in its ability
A) to generally predict how price and quantity will change with supply and demand shocks.
B) to precisely predict the impact of government regulations on quantity and price.
C) to precisely determine the difference between price ceilings and price floors.
D) to generally predict how profit motive impacts the distribution of goods and services.
A
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Which of the following is an example of a geographic monopoly?
a. a store in Childersburg that sells only shoelaces b. the only gas station in a radius of one mile c. a store in Sycamore that sells only scrap metal d. the only restaurant in a radius of 200 miles
Suppose the fixed cost of building a nuclear power plant is $1 billion. Suppose also that the only variable cost is the labor of Homer Simpson, and he earns $10 per hour. If the plant generates 1,000 kilowatts each hour, and has already generated 1 billion kilowatts, what can you say about the marginal cost of the next kilowatt?
A. The marginal cost is falling. B. The marginal cost is equal to $.01. C. The marginal cost is equal to $1.01. D. The marginal cost is rising.