Suppose the market for pizza slices is in equilibrium at a price of $1 per slice. What conditions are likely to be satisfied in the pizza slice market?
What will be an ideal response?
The conditions that are satisfied when the market for pizza slices is in equilibrium are:
a) The number of pizza slices manufactured by sellers will equal the number of pizza slices purchased by buyers.
b) Pizza sellers will produce pizzas at the point where the cost of production is less than or equal to the market price of $1.
c) Buyers will consume pizza as long as the benefit that they derive from consumption is at least equal to the market price of $1.
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The slope of the consumption function is equal to
A) the change in national income divided by the change in consumption. B) the change in disposable income divided by the change in consumption. C) the change in consumption divided by the change in personal income. D) the change in consumption divided by the change in disposable income.
When revenue is less than total cost but more than variable cost it implies that:
a. the firm is enjoying positive economic profits. b. the firm is earning normal profits. c. the firm can cover its variable cost and a part of its fixed costs. d. the firm is unable to cover its costs and should shut down. e. the firm is able to cover both its fixed and variable costs.