(Elasticity and Total Revenue) Explain the relationship between the price elasticity of demand and total revenue.
(Determinants of Price Elasticity) Would the price elasticity of demand for electricity be more elastic over a shorter or a longer period of time?
(Explicit and Implicit Costs) Determine whether each of the following is an explicit cost or an implicit cost:
a. Payments for labor purchased in the labor market
b. A firm's use of a warehouse that it owns and could rent to another firm
(Long-Run Average Cost Curve) Explain the shape of the long-run average cost curve. What does "minimum efficient scale" mean?
When a government wants to increase tax revenue, they will often increase the sales tax on gasoline. Using price elasticity of demand, explain why the tax would be placed on gasoline rather than, say, yachts. What might be the long run effect of raising the price of gas?
The shape of the long-run cost curve is determined by economies and diseconomies of scale. Contrast this curve with the short-run cost curve as it relates to increasing and diminishing marginal returns to labor.