New answers tagged supply-and-demand
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Water more expensive in the desert. Why?
The cities won't have the same supply. Supply is the relationship between the price and the quantity supplied to the market (you should not confuse quantity supplied with supply). Higher costs mean ...
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Q question on the components of the $M_1$ component of money supply
M1 is supposed measure all money outside the Treasury, Fed and depository institutions (FRED).
Foreign central banks are not part of Fed, they are not part of the Treasury and modern central banks are ...
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regulation using taxes
No it should not. That would happen if demand is perfectly inelastic. But in your case the exam directly tells you neither supply or demand is perfectly inelastic. In that case the burden will be ...
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How can an individual firm sell ANY quantity for the market price under perfect competition?
The firm can’t really sell any quantity they wanted at the equilibrium price (even if it had not increasing but constant marginal costs). Since Revenue is $R = P q$, we have that the marginal revenue ...
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How can an individual firm sell ANY quantity for the market price under perfect competition?
In my opinion, you are right. This is a question that upsets many students, and I think they are right.
'The individual firm can sell ANY quantity as long as they sell at the equilibrium price' is a ...
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How can an individual firm sell ANY quantity for the market price under perfect competition?
The textbook model assumes that an individual firm could sell any quantity at the market price, but of course it will only sell the quantity which maximizes its profit. (Graphically speaking, while ...
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