(a) Due to the increase in the demand for video games, the equilibrium price of video games increases by 10 percent, and the equilibrium quantity increases by 5 percent. Is the price elasticity of supply of video games elastic, inelastic, or indeterminate? Explain your answer (with calculation if possible). (b) Suppose Marcus produces chocolate with two inputs: factory and labor. If the workers become more productive with better training, state whether the average fixed cost, average variable cost, average total cost, and marginal cost will rise or fall?
(a) Due to the increase in the demand for video games, the equilibrium price of video games increases by 10 percent, and the equilibrium quantity increases by 5 percent. Is the price elasticity of supply of video games elastic, inelastic, or indeterminate? Explain your answer (with calculation if possible). (b) Suppose Marcus produces chocolate with two inputs: factory and labor. If the workers become more productive with better training, state whether the average fixed cost, average variable cost, average total cost, and marginal cost will rise or fall?
Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter3: Market Demand And Supply
Section: Chapter Questions
Problem 12SQ
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(a) Due to the increase in the demand for video games, the
Is the price elasticity of supply of video games elastic, inelastic, or indeterminate? Explain your answer (with calculation if possible).
(b) Suppose Marcus produces chocolate with two inputs: factory and labor. If the workers become more productive with better training, state whether the average fixed cost, average variable cost, average total cost, and marginal cost will rise or fall?
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