A determinant of the price elasticity of supply is the extent to which
A) consumers like the quality of the good.
B) the demand for the good is relatively elastic.
C) the good has many consumer substitutes.
D) production of the good uses commonly available resources.
D
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Most businesses probably claim they use cost-plus-markup pricing because
A) they are price takers. B) they are maximizing net revenue. C) they have no better way to explain their price-setting behavior. D) they are responsible for long-run inflation.
A classical objection to Keynesian sticky price models is that
A) it is easier for firms to change prices rather than change output. B) it is cheaper for firms to change output rather than change prices. C) sticky price models are internally inconsistent. D) real shocks are more important than nominal shocks.