The Hard Times Concrete Company Is a Monopolist in the Concrete

question 4

Multiple Choice

The Hard Times Concrete Company is a monopolist in the concrete market.It uses two inputs, cement and gravel, which it buys in competitive markets.The company's production function is q = c^1/2g^1/2q, where q is its output, c is the amount of cement it uses, and g is the amount of gravel it uses.If the price of cement goes up, the firm's demand for cement

• A)goes down and its demand for gravel goes up.
• B)and its demand for gravel go down.
• C)goes down and its demand for gravel may go up, down, or remain the same, depending on the demand function for concrete.
• D)may go up, down, or not change, depending on whether the cement's elasticity of demand is less than, equal to, or greater than 21.
• E)could go up or down but must move in the opposite direction from its demand for gravel.

---

Definitions:

Earnings Per Share

A company's profit divided by the number of outstanding shares of its common stock, indicating the company's profitability.

Quick Ratio

A liquidity indicator that measures a company's ability to meet its short-term obligations with its most liquid assets.

Marketable Securities

Financial instruments that can be easily converted to cash, typically within one year, such as stocks or bonds.

Inventory

The raw materials, work-in-progress products, and finished goods that are considered to be part of a business's assets that are ready or will be ready for sale.