Suppose that the elasticity of demand for chocolate is 3.0 and price decreases by 20%. By what percentage will quantity demanded for chocolate increase?
A. 20%
B. 30%
C. 60%
D. 200%
Answer: C
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Calculate the arc price elasticity of demand for wheat in the two situations below:
The Wheat Market Farmer Brown's Wheat Old price; $3.40/bu Old price; $3.40/bu Old quantity; 2.5 billion bu Old quantity; 28,000 bu New price; $3.20/bu New price; $3.20/bu New quantity; 2.525 billion bu New quantity; 35,000 bu Can you account for the difference in elasticities?
A one-year Treasury bill that sells for $943.40 and has a face value of $1,000 has an annual yield of
A) 8 percent. B) 7 percent. C) 6 percent. D) 5 percent.
Which of the following is true of the output level produced by a firm in long-run equilibrium in a monopolistically competitive industry?
A) It produces at minimum average cost. B) It does not produce at minimum average cost, and average cost is increasing. C) It does not produce at minimum average cost, and average cost is decreasing. D) Either B or C could be true.
According to the graph shown, the profit being earned by this monopolist is:
This graph shows the cost and revenue curves faced by a monopoly.
A. (P3 P0) ×Q1
B. (P3 P1) × Q1
C. (P1 P0) × Q1
D. (P3 P0)/Q1