If a firm finds that increases in output lead to increases in long-run average total cost, then it must be experiencing _________ which could be caused by ___________
Fill in the blank(s) with the appropriate word(s).
Answer:
a. diseconomies of scale
b. coordination problems
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If a 2 percent rise in price leads to a 4 percent decrease in quantity demanded, then demand is
A) elastic and total revenue decreases. B) elastic and total revenue increases. C) inelastic and total revenue decreases. D) elastic, but we cannot tell what happens to total revenue without more information. E) Total revenue decreases but we cannot tell if the demand is elastic or inelastic without more information.
Many younger people eat peanut butter AND jelly, whereas many older people eat peanut butter OR jelly. This suggests that the cross elasticity of demand between peanut butter and jelly is
A) negative for youngsters and positive for oldsters. B) positive for youngsters and negative for oldsters. C) negative for youngsters and zero for oldsters. D) positive for youngsters and zero for oldsters.