If the Price of Steel Increases Drastically, the Quantity of Steel

question 6

Multiple Choice

If the price of steel increases drastically, the quantity of steel demanded by the building industry will fall significantly over the long run because

• A)buyers of steel are more sensitive to a price change if they have more time to adjust to the price change.
• B)buyers of steel are less sensitive to a price change if they have more time to adjust to the price change.
• C)sales revenue in the building industry will fall sharply.
• D)profits will fall by a greater amount in the long run than in the short run.

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Definitions:

Nondiscriminating

Characterized by equal treatment and lack of bias towards any party or group.

Pure Monopolist

A market structure where a single firm has exclusive control over the market, being the sole producer of a product with no close substitutes.

Economic Profit

The balance a firm holds after all expenses, both acknowledged and assumed, are deducted from its gross receipts.

Price Discriminating

A pricing strategy where identical or similar products or services are sold at different prices to different buyers.