Which of the following explains most accurately why the firm's short-run marginal cost curve will eventually rise?
A. As more of the variable factor is used, the higher the price of that factor.
B. When diminishing marginal returns set in, it will take ever-larger quantities of the variable resources to produce an additional unit of output.
C. As the variable factor is used more intensely, its marginal product will rise, causing an increase in marginal costs.
D. As the size of the firm increases, the operational efficiency of the firm declines, causing an increase in marginal costs.
Answer: B
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If the price of automobiles was to increase, then
A) the quantity of gasoline demanded would decrease. B) the demand for gasoline would increase. C) the demand for gasoline would decrease. D) the supply of gasoline would increase.
Several states require cosmetologists to undertake 1,500 hours or more of training in order to obtain a license to provide hair styling or braiding services. This is an example of
a. antitrust legislation. b. government action that promotes competition. c. a barrier to entry d. the legal structure that is required for the operation of price-taker markets.