The amount by which people will increase or decrease their purchases when prices change
A) is typically greater in the case of luxuries than in the case of necessities.
B) is typically less for business firms than for households because business firms can more easily borrow to maintain purchasing patterns.
C) is typically less for business firms than for households because business firms must have certain goods to remain in operation.
D) tends to be greater over longer periods of time because it takes time to invent and to discover substitutes.
E) will be approximately zero unless the demand also changes.
D
You might also like to view...
Refer to Figure 18-1. Area B + C represents
A) the portion of sales tax revenue borne by consumers. B) the portion of sales tax revenue borne by producers. C) the excess burden of the sales tax. D) sales tax revenue collected by the government.
Risks faced by multinational corporations include
A) changes in exchange rates. B) restrictions on ownership. C) repatriation of funds. D) cultural and religious philosophies. E) All of the above
At market equilibrium, the total benefit that results from all the transactions is
A. the sum of the producer surplus and the consumer surplus. B. the consumer surplus minus the producer surplus. C. the entire area under the demand curve up to the quantity exchanged. D. the producer surplus minus the consumer surplus.
The threat of punishment in a repeated game tends to:
A. reduce the incentive to break a pricing agreement. B. anger the other firms, resulting in a price war. C. maintain prices at the duopoly price level. D. deter entry.