A technological innovation that reduces a firm's cost of producing additional units of output will lead to:
A. an increase in the quantity supplied by the firm, but no change in the firm's supply.
B. a decrease in the firm's supply.
C. an increase in the firm's supply.
D. a decrease in the quantity supplied by the firm, but no change in the firm's supply.
Answer: C
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An increase in the demand for HDTV sets leads to an increase in demand for LCD and LED TV screens. This situation arises because:
A. LCD and LED screens minimize the costs of production B. The supply of LCD and LED screens has decreased C. The demand for LCD and LED screens is a derived demand D. Of foreign production of LCD and LED screens
Why might equipment costs be short-run costs in one business but long-run costs in another?
a. The size and complexity of a business contributes to the nature of its capital costs. b. Companies in business for a long time have established credit with equipment vendors. c. Some equipment is poorly made and does not last through longer production runs. d. Equipment is a variable input that is not affected by output or length of production.