When price is too low.
When price is too high.
The maximum legal price that can be charged. Cause shortages. Placed below market equilibrium.
The minimum legal price that can be charged. Cause surplus. Placed above market equilibrium.
Full Economic Price
The dollar amount paid to a firm under a price
ceiling, plus the non-pecuniary price.
How responsive is variable "G" to a change in
Factors Affecting Own Price Elasticity
Available Substitutes (more available = more elastic)
Time (short-term = inelastic)
Expenditure Share (less expensive = inelastic)
Increase (a decrease) in price leads to a decrease (an increase) in total revenue.
Increase (a decrease) in price leads to an increase (a decrease) in total revenue.
Total revenue is maximized at the point where
demand is unitary elastic.
simply the real world by ignoring minor details.
Corporation and limited liability company
Under which form(s) of business organization are owners not responsible for the company's debt if the
company goes bankrupt?
An ____ cost is defined as the return from the best-alternative use of a resource.
does not measure; includes
Accounting cost ____ depreciation as the change in market value of the asset and ____ the wages paid
Using opportunity cost rather than accounting cost enables managers to make more profitable decisions.
3 units of the action because that is the action that sets the marginal benefit equal to the marginal cost.
The table on the right shows the marginal benefit and marginal cost of an action. Using marginal analysis,
managers should undertake