A Decrease in Resource Prices Will Increase the Incentive of

question 107

Multiple Choice

A decrease in resource prices will increase the incentive of

• A) users to purchase the resource.
• B) suppliers to provide more of the resource.
• C) firms to find and develop substitutes for the resource.
• D) consumers to look for alternatives that do not contain the resource.

Define and distinguish between short-run and long-run operational decisions in perfect competition.

Identify the breakeven and shutdown points of a firm's operation.

Understand the relationship between total revenue, total profit, and output levels.

Recognize the impact of market entry and exit on industry prices and profits in the long run.

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Definitions:

Natural Resources

Materials or substances occurring in nature which can be exploited for economic gain.

Monopolist's Pricing

The strategy used by a monopoly to determine the price of its product, often maximizing profits by controlling supply and determining demand.

Consumer Surplus

Consumer surplus is the difference between the total amount that consumers are willing and able to pay for a good or service and the total amount that they actually pay.

Socially Unproductive

Activities or behaviors that do not contribute to, or may detract from, societal welfare or economic efficiency.