Figure 9.3Figure 9.3 shows the cost structure of a firm in a perfectly competitive market. The firm will stay in the market in the long run only if the market price is greater than or equal to:
A. $4.50.
B. $6.
C. $10.
D. $15.
Answer: C
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We calculate the price elasticity of demand as the
A) ratio of the percentage change in the quantity demanded to the percentage change in price. B) change in quantity divided by the change in price. C) ratio of the percentage change in the price to the percentage change in quantity. D) percentage change in the quantity demanded divided by the percentage change in income. E) equilibrium quantity divided by the equilibrium price.
Refer to the scenario above. The winner of this auction will earn a surplus of ________ if he follows his dominant strategy
A) $100 B) $300 C) $400 D) $200
The limited liability enjoyed by Jitters Coffee Company Corporation is a benefit that protects
A) its employees. B) its Board of Directors. C) its stockholders. D) all of the above
A previously well-respected and trusted president of a corporation is accused of fraud. At the same time interest rates unexpectedly fall. Which of the above would tend to make the price of the stock rise?
a. the announcement and the fall in interest rates b. the announcement but not the fall in interest rates c. the fall in interest rates, but not the announcement d. neither the announcement nor the fall in interest rates