When total revenue remain unchanged when there is a change in price, demand is
A. unit-elastic.
B. inelastic.
C. elastic.
D. not related.
Answer: A
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Rivalry among firms would tend to be high if
a. Firms are located further from each other b. Firms are located close to one another c. There is only one firm in the market d. None of the above
If both the demand for and the supply of computers are increasing, which of the following statements is TRUE?
A) The consumer should buy a computer now since the price will be higher in the future. B) The consumer should wait and buy a computer later since the price will be lower in the future. C) The price of a computer will be the same in the future as it is now. D) It is impossible to know, given only this information, whether the prices of computers will go up or down in the future.
Long-run aggregate supply shocks are not a source of business cycle fluctuations in the ________, because ________
A) traditional Keynesian model; long-run supply shocks are incompatible with adaptive expectations B) traditional Keynesian model; demand fluctuations are considered of dominant importance C) real business cycle model; shocks cannot persist in the long run, when prices and wages are flexible D) new Keynesian model; such shocks are anticipated by forward-looking consumers and firms
A process through which a firm seeks to obtain earnings without contributing to production, thus wasting valuable resources, is known as
a. moral hazard. b. rent seeking. c. detrimental externality. d. a defective telescopic faculty.