A key determinant of the price elasticity of supply is the time period under consideration. Which of the following statements best explains this fact?
a. Supply curves are steeper over long periods of time than over short periods of time.
b. Buyers of goods tend to be more responsive to price changes over long periods of time than over short periods of time.
c. The number of firms in a market tends to be more variable over long periods of time than over short periods of time.
d. Firms prefer to change their prices in the short run rather than in the long run.
c
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The difference between nominal and real interest rates is that
A) nominal interest rates are measured in terms of a country's output, while real interest rates are measured in monetary terms. B) nominal interest rates are measured in monetary terms, while real interest rates are measured in terms of a country's output. C) nominal interest rates can fluctuate, while real interest rates always remain fixed. D) real interest rates can fluctuate, while nominal interest rates always remain fixed. E) real interest rates are the same in every country, while nominal interest rates are different for every country.
What is a key criterion involved in deciding a natural monopoly?
a. Size of the firm relative to its competitors. b. Size of the firm relative to the total market demand for a product. c. Magnitude of profits generated by the company. d. A firm's ability to adapt to market changes.