Assume the cost of certain inputs used to produce artificial Christmas trees increases and, at the same time, the economy moves into a recession, causing the incomes of consumers to decrease
Which of the following will happen to the equilibrium price and quantity of artificial Christmas trees? (Assume artificial Christmas trees are normal goods.) A) Price will increase; quantity cannot be determined.
B) Price will decrease; quantity cannot be determined.
C) Quantity will increase; price cannot be determined.
D) Quantity will decrease; price cannot be determined.
D
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If a firm happened to be the only seller of a particular product, it might behave as a price taker as long as
A) buyers have full information about the firm's price. B) the transaction costs of doing business with this firm are low. C) there are many buyers. D) there is free entry and exit.
The short run:
A. means that output cannot be changed. B. means the price of output is fixed. C. means the firm cannot increase or decrease at least one of its inputs. D. All of these are true.