Assume that coal is a normal good. If the price of coal increases and the quantity sold increases, which of the following is consistent with these observations?
What will be an ideal response?
The price of oil increased, oil and coal being substitutes.
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Which of the following is TRUE concerning equilibrium in a monopsonistic factor market?
A) The firm uses the efficient level of the input but does not maximize profit. B) The firm maximizes profit but does not use the efficient level of the input. C) The firm maximizes profit and uses the efficient level of the input. D) The firm either maximizes profit or uses the efficient level of the input, but it cannot do both at the same time.
Which of the following must be true if a price-searcher firm is operating at the profit-maximizing output rate?
a. The marginal cost of producing the last unit is greater than the marginal revenue derived from its sale. b. The marginal cost of producing the last unit is no greater than the marginal revenue derived from its sale. c. The total cost of producing all units is no greater than the total revenue derived from the sale of the units. d. The total cost of producing all units is less than the total revenue derived from the sale of the units.