When the price of a video rental was $2.00, ticket sales at the local movie theatre averaged 180 admissions per night
Then the video store reduced the price of a video rental to $1, and the theatre manager reported that ticket sales had fallen to 126 per night. What is the approximate value of the cross price elasticity of demand between video rentals and theatre tickets? A) -0.53
B) +0.30
C) +0.53
D) +1.67
C
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Which of the following characteristics does perfect competition share with monopolistic competition?
a. price-taking firms b. zero long-run economic profit c. homogeneous product d. some barriers to entry e. economies of scale in production
Gains from trade can be realized if each country specializes in the production of a good in which it has a comparative advantage
a. True b. False Indicate whether the statement is true or false
Which of the following is true for the law of demand?
A. Sellers increase the quantity of a good available as the price of the good increases. B. An increase in price results from false needs. C. There is an inverse relationship between the price of a good and the quantity of the good demanded. D. Prices increase as more units of a product are demanded.
In a Bertrand model, market power is a function of
A) marginal cost. B) the number of firms. C) price elasticity of supply. D) product differentiation.