Question
In: Economics
19) The ________, the ________ necessary for short-run market adjustment. A) lower the fixed costs; greater...
19) The ________, the ________ necessary for short-run market adjustment.
A) lower the fixed costs; greater the price change
B) higher the marginal revenue; larger the marginal cost
C) higher the fixed costs; greater the price change
D) lower the average variable costs; smaller the marginal cost
E) none of the above
Solutions
Expert Solution
Answer -
Option (A) - Lower the fixed costs, greater the price change is correct.
Explanation -
Short run is a time period in which some factor inputs are fixed innitially and some factor inputs are variable like labour, raw material in the production process according to the requirement of production.It is usually the practice in short run to decrease or lower fixed costs.Short run is a period in which prices may quickly shift to restore market equilibrium.so price change is more to attain market equilibrium in short run.
Rahul Sunny answered 2 years agoRelated Solutions
3. Short-run costs are generally lower than long-run costs.
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Q (Output)
TVC (Total Variable Cost
0
0.00
1
2,500
2
4,000
3
5,000
4
6,200
5
7,600
6
9,360
7
11,500
8
13,860
9
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Q
TVC
0
0.00
1
8,000.00
2
15,000.00
3
20,000.00
4
23,000.00
5
25,000.00
6
29,000.00
7
33,500.00
8
39,000.00
9
46,000.00
10
53,500.00
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