Resource X Is Necessary to the Production of Good Y

question 73

Multiple Choice

Resource X is necessary to the production of good Y.If the price of resource X falls,the equilibrium price of Y will ______________ and the equilibrium quantity of Y will ________________.

• A) rise; rise
• B) fall; fall
• C) fall; rise
• D) rise; fall

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Definitions:

Average Variable Cost

The total variable costs of production divided by the quantity of output produced, indicating the cost to produce an additional unit when fixed costs are excluded.

Marginal Cost Function

A mathematical representation that describes how the cost of producing one additional unit of a good varies as the quantity of production changes.

Market Short-Run Supply

The total quantity of a good or service that producers are willing and able to sell at current prices in the short run, considering fixed and variable costs.

Units of Output

The individual items or quantities produced by a process or system.