<span>performing calculations and using equipment</span>
Answer: True.
Explanation:
Here, the statement is related to the economic theory of demand, not with economic theory of supply. So, we are considering only law of demand.
The statement is true according to the economic theory of demand.
Economic theory of demand states that other things remains constant, increase in the price of a commodity results in lower demand for that commodity and vice versa. There is an inverse relationship between the price and demand of a commodity.
Economic theory of supply states that other things remains constant, increase in the price of a commodity results in higher supply for that commodity and vice versa. There is a direct relationship between the price and supply for a commodity.
Answer:
The correct answer is option D.
Explanation:
The market price is P.
The marginal cost is given at MC.
The subsidy is equal to s.
When the subsidy is provided to only a single firm, that firms marginal cost will decline. The firm can take advantage of decreased marginal cost by increasing the output level. The firm will produce the output where the price and marginal revenue is equal to marginal cost plus subsidy. At this point, the firm will be having maximum profit.
So, the firm will increase production until
P=MC+S
Answer:
c. will earn zero economic profits but positive accounting profits.
Explanation:
In a competitive industry, there are many buyers and sellers of homogenous goods and services. There are also low barriers to entry and exit of firms. In the short run, if a firm is earning economic profit, new firms enter into the industry and drive economic profit to zero. Thus, in the long run, a firm only earns accounting profit.
Accounting profit is total revenue less total cost or explicit cost.
Economic profit is accounting profit less implicit cost or opportunity cost.
I hope my answer helps you
