A 3 percent increase in the price of tea causes a 6 percent increase in the demand for coffee. The cross elasticity of demand for coffee with respect to the price of tea is:
A. -0.5
B. +0.5
C. -2.0
D. +2.0
D. +2.0
Economics
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A perfectly competitive firm's marginal cost exceeds its marginal revenue at its current output. To increase its profit, the firm will
A) lower its price. B) raise its price. C) decrease its output. D) increase its output.
Economics
Refer to the graph shown. The graph exhibits economies of scale:
A. in region a. B. in region b. C. over the entire range of output. D. in region c.
Economics
Self-adjustment of markets is assumed in:
A. Classical economic theory. B. Keynesian theory. C. Supply-side economic theory. D. The eclectic viewpoint.
Economics
If a firm increases production, then its:
A. fixed costs stay the same. B. total costs increase. C. variable costs rise. D. All of these are true.
Economics