Supply and Demand Both Tend to Become More Elastic in the Long

question 37

Essay

Supply and demand both tend to become more elastic in the long run.What does this mean for the deadweight loss and tax revenue from a tax in the long run compared to the short run?

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Definitions:

Direct Labor Costs

Expenses directly tied to the production of goods or services, which include wages and benefits paid to employees who physically produce a product.

Labor Efficiency Variance

The difference between the actual hours worked and the standard hours expected, weighted by the standard labor rate.

Labor Rate Variance

The difference between the actual hourly labor cost and the standard or budgeted hourly labor cost, multiplied by the total hours worked.

Materials Quantity Variance

The variance between the real amount of materials consumed in the production process and what was anticipated, calculated by the standard cost for each unit.