A city wants to raise revenues to build a new municipal swimming pool next year. The mayor suggests that the city raise the price of admission to the current municipal pools this year to raise revenues. The city manager suggests that the city lower the price of admission to raise revenues. Who is correct?
a. Both the mayor and city manager would be correct if demand were price elastic.
b. Both the mayor and city manager would be correct if demand were price inelastic.
c. The mayor would be correct if demand were price elastic; the city manager would be correct if demand were price inelastic.
d. The mayor would be correct if demand were price inelastic; the city manager would be correct if demand were price elastic.
d
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A) 8% B) 20% C) 37% D) 60%
Which of the following is NOT a feature of monopolistic competition?
A) significant numbers of sellers in a highly competitive market B) differentiated products C) sales promotion and advertising D) inability of firms to enter or exit the market
The 2001 and 2003 tax cuts of the George W. Bush administration each had provisions to
A. lower the earned income tax credit. B. raise tax rates at the upper end. C. raise tax rates at the lower end. D. increase (or speed up the already scheduled increase in) the child tax credit.
Whenever a firm can charge a price greater than marginal cost
A) the firm must be a monopolist. B) consumers have the ability to choose a close substitute. C) there is some loss of economic efficiency. D) the firm will earn economic profits.