If the baseball team can sell 6000 box-seat tickets when they set the price at $10 and 7000 box-seat tickets when they lower the price to $8, the marginal revenue per ticket between 6000 and 7000 tickets is
A) $60,000.
B) $56,000.
C) $9.
D) $2.
E) minus $4.
E
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When a firm sets a price relatively low in order to increase the market share, it is referred as
A) price skimming. B) limit pricing. C) penetration pricing. D) predatory pricing.
If the price elasticity of demand is less than 1, then consumer demand is
A) unrelated to the elasticity of demand. B) inelastic. C) elastic. D) unitary elastic.
If the price elasticity of demand (Ep) equals one in the short run, then, other things being equal, in the long run Ep will be
A. less than one. B. one. C. greater than one. D. indeterminate without more information.
Answer the following statements true (T) or false (F)
1. The cornerstone of antitrust policy in the United States is generally considered to be the Sherman Antitrust Act of 1890. 2. All price discrimination is deemed illegal in antitrust legislation. 3. Unfair advertising practices are investigated by the Federal Trade Commission. 4. The rule of reason in antitrust applications means that if a firm has a dominant share of the market, it stands to reason that it will exploit its monopoly power to gain an unfair advantage over its rivals. 5. "Behaviorists" in antitrust applications believe that a firm that dominates a market is not necessarily behaving unfairly.