When an input represents a small proportion of a firm's total costs, then
A) demand for the input will tend to be less elastic.
B) the input demand will vary significantly with a change in input price.
C) the usage of the input cannot be varied in the production function.
D) output demand will be highly elastic.
Answer: A
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The "equilibrating mechanism," the reason the economy tends toward equilibrium in the simple Keynesian model, is primarily
A) autonomous but flexible prices. B) production responses to unplanned inventory changes. C) exogenous inventory changes. D) endogenous price changes.
Second-degree price discrimination is the practice of charging
A) the reservation price to each customer. B) different prices for different quantity blocks of the same good or service. C) different groups of customers different prices for the same products. D) each customer the maximum price that he or she is willing to pay.