Scenario 5.1
The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P x . Assume that P = $8, I = 200, and P x = $10.
-If firms have to change their production techniques in order to change the quantities they supply, their response to a price change will be less in a period of a year as compared to what they can do in a month.

Question

Quizplus · Accepted Answer

Firms typically have more flexibility to adjust production techniques and respond to price changes over a longer period, such as a year, compared to a shorter period, like a month.

Scenario 5.1 The Demand for Noodles Is Given by the Following Equation