Practice Input Prices (4.5.2) - The Theory of the Firm under Perfect Competition
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Input Prices

Practice - Input Prices

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Practice Questions

Test your understanding with targeted questions

Question 1 Easy

What happens to a firm's supply curve when input prices increase?

💡 Hint: Think about how increased costs affect production.

Question 2 Easy

Describe the effect of a decrease in input prices.

💡 Hint: How does reduced cost allow firms to respond?

4 more questions available

Interactive Quizzes

Quick quizzes to reinforce your learning

Question 1

What effect do increased input prices have on supply?

Supply increases
Supply decreases
No effect

💡 Hint: Refer to how costs relate to output.

Question 2

True or False: Lower input prices allow firms to supply less at the same market price.

True
False

💡 Hint: Remember the dynamics of cost and supply.

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Challenge Problems

Push your limits with advanced challenges

Challenge 1 Hard

A company producing furniture faces a price increase in wood by 50%. How might this affect their supply curve, and what strategies could they employ to adapt?

💡 Hint: Think about how businesses respond to cost pressures.

Challenge 2 Hard

Evaluate a scenario where input prices drop significantly, yet the demand remains stagnant. What implications does this have for the market?

💡 Hint: Consider the role of demand elasticity in conjunction.

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Reference links

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