In the demand curve shown in the above graph we are closest to unit elasticity at point
A. point Q.
B. point R.
C. point S.
D. point T.
C. point S.
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Which of the following is NOT a direct determining factor of consumers' purchase decisions?
A) Consumers' tastes and preferences B) Market price of the finished goods C) Cost of factor inputs D) Consumers' income
If a marginal cost pricing rule is imposed on the natural monopoly in the figure above, then the consumer surplus will be
A) $0. B) $8 million. C) $16 million. D) $32 million.
Marissa owns a small cottage by the lake. Big Boy’s Sawmill is next door, and it dumps sawdust into a sinkhole it owns. Unfortunately for Marissa, the sinkhole opens into a brook on her land, which gets clogged by the sawdust. It costs Marissa $3,000 per year to clean up the sawdust. Big Boy’s can dispose of the sawdust by having it hauled away for $2,000 per year. Marissa offers to pay Big Boy’s $2,500 per year to have the sawdust hauled away. In this example of the Coase theorem, what is the annual pecuniary cost to society of negative externality before any transaction occurs between Marissa and Big Boy’s?
a. $2,000 b. $2,500 c. $3,000 d. $5,000
A credible threat is:
A. legally enforceable. B. in the threatener's interest to carry out. C. not in the threatener's interest to carry out. D. possible to carry out.