demand and supply S

Question 1

supply

Answer 1

refers to the quantity of goods or services that firms are willing and able to sell at any given price, per time.

Question 2

there is a positive relationship between price and quantity supplied true or false

Answer 2

true

Question 3

2 reasons for the positive relationship

Answer 3

1. existing firms in the market can earn higher profit margins.
2. new firms enter the market with the high prices and profit

Question 4

DMR or law of diminishing marginal returns

Answer 4

when output is affected as a firm uses more factors of production or inputs while maintaining one factor of production fixed in the short run.

Question 5

law of DMR only applies in the short run as all factors of production are variable in the long run. true or false

Answer 5

true

Question 6

marginal cost refers to

Answer 6

the cost of producing an additional unit of output.