Suppose that the supply of gasoline decreases. Price will ________ and consumer surplus will ________.
A. increase; increase
B. increase; decrease
C. decrease; increase
D. decrease; decrease
Answer: B
You might also like to view...
The F-statistic is an alternative measure of goodness-of-fit of an estimated regression equation and defined as the:
A) variation not explained by the regression equation relative to the variation explained. B) variation explained by the regression equation to the variation not explained. C) variation explained. D) variation not explained.
For firms that sell one product in a perfectly competitive market, the market price:
A. is equal to the average total cost of a firm. B. is higher than the marginal revenue of a firm C. can be influenced by one firm's output decision. D. is taken as a constant by individual firms.
If market demand increases and market supply decreases, the change in equilibrium price is unpredictable without first knowing the exact magnitudes of the demand and supply changes.
Answer the following statement true (T) or false (F)
Ali's Gyros operates near a college campus. Ali has been selling 120 gyros a day at $4.50 each and is considering a price cut. He estimates that he would be able to sell 200 gyros per day at $3.50 each
a. Calculate the price elasticity of demand using the midpoint formula. b. Calculate the change in revenue as a result of the price cut. What will be an ideal response?