Can electric utility companies always raise their total revenue by raising their rates?
What will be an ideal response?
No. As electric companies continue to raise rates, customers move up along their demand curves for electricity, obeying the law of demand. As they do, they eventually enter an elastic portion of their demand curves, along which total revenue will decrease when rates increase further.
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The real interest rate has a positive relationship with the supply of loanable funds
Indicate whether the statement is true or false
Total surplus is
A. the sum of consumer’s surplus plus producer’s surplus. B. the consumer’s surplus minus the producer’s surplus. C. the product price minus the sum of consumer’s surplus and producer’s surplus. D. consumer surplus minus marginal utility of the produce.
Differentiate between consumer’s surplus and producer’s surplus. For a rational consumer, consumer’s surplus will never be a negative number. Why?
What will be an ideal response?
Social Security is an example of a(n)
a. annuity b. public payment c. exclusive payment d. merit payment e. transfer payment