This topic contains a solution. Click here to go to the answer

Author Question: Suppose that, at the market clearing price of natural gas, the price elasticity of demand is -1.2 ... (Read 162 times)

tiara099

  • Hero Member
  • *****
  • Posts: 588
Suppose that, at the market clearing price of natural gas, the price elasticity of demand is -1.2 and the price elasticity of supply is 0.6. What will result from a price ceiling that is 10 percent below the market clearing price?
 
  A) A shortage equal to 1.8 percent of the market clearing quantity
  B) A shortage equal to 0.6 percent of the market clearing quantity
  C) A shortage equal to 18 percent of the market clearing quantity
  D) A shortage equal to 6 percent of the market clearing quantity
  E) More information is needed.

Question 2

For the firm's cost minimization problem, one of the key assumptions for each input is that:
 
  A) marginal product is constant.
  B) marginal product is increasing at a decreasing rate.
  C) marginal product is increasing at an increasing rate.
  D) marginal product is decreasing at an increasing rate.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

taylorsonier

  • Sr. Member
  • ****
  • Posts: 377
Answer to Question 1

C

Answer to Question 2

B





 

Did you know?

Tobacco depletes the body of vitamins A, C, and E, which can result in any of the following: dry hair, dry skin, dry eyes, poor growth, night blindness, abscesses, insomnia, fatigue, reproductive system problems, sinusitis, pneumonia, frequent respiratory problems, skin disorders, weight loss, rickets, osteomalacia, nervousness, muscle spasms, leg cramps, extremity numbness, bone malformations, decayed teeth, difficulty in walking, irritability, restlessness, profuse sweating, increased uric acid (gout), joint damage, damaged red blood cells, destruction of nerves, infertility, miscarriage, and many types of cancer.

Did you know?

Although not all of the following muscle groups are commonly used, intramuscular injections may be given into the abdominals, biceps, calves, deltoids, gluteals, laterals, pectorals, quadriceps, trapezoids, and triceps.

Did you know?

Increased intake of vitamin D has been shown to reduce fractures up to 25% in older people.

Did you know?

Barbituric acid, the base material of barbiturates, was first synthesized in 1863 by Adolph von Bayer. His company later went on to synthesize aspirin for the first time, and Bayer aspirin is still a popular brand today.

Did you know?

The senior population grows every year. Seniors older than 65 years of age now comprise more than 13% of the total population. However, women outlive men. In the 85-and-over age group, there are only 45 men to every 100 women.

For a complete list of videos, visit our video library