1. Explain the relationship between the
price elasticity of demand and total revenue.
2. Is the price elasticity of gasoline more
elastic over a shorter or a longer period of time? Explain.
3. Determine whether each of the
following is an explicit cost or an implicit cost:
a) Payments for rented manufacturing equipment
b) A firm’s use of a warehouse that it owns and
could rent to another firm
c) Wages paid to the firm’s workers
d) The wages the firm’s owner could earn if he
worked for another company
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