Which of the following is a variable cost for an airline?
a. insurance
b. property taxes
c. jet fuel
d. rent of airport space
c
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Assume oligopoly firms are profit maximizers, they do not form a cartel, and they take other firms' production levels as given. Then in equilibrium the output effect
a. must dominate the price effect. b. must be smaller than the price effect. c. must balance with the price effect. d. can be larger or smaller than the price effect.
When the price of hot dogs is $1.50 each, 500 hot dogs are sold every day. After the price falls to $1.35 each, 510 hot dogs are sold every day. At the original price, what is the price elasticity of demand for hot dogs?
A. 0.2 B. 2 C. 5 D. 66.67
Suppose demand increases and supply decreases. Which of the following will happen?
What will be an ideal response?
A decrease in supply will always
A. increase consumer surplus. B. increase producer surplus. C. decrease producer surplus. D. decrease consumer surplus.