Charging prices closer to what consumers are willing to pay for a good
a. Reduces consumers surplus
b. Increases producer surplus
c. Both a and b
d. None of the above
c
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After a country goes from disallowing trade in coffee with other countries to allowing trade in coffee with other countries,
a. the domestic price of coffee will be greater than the world price of coffee. b. the domestic price of coffee will be lower than the world price of coffee. c. the domestic price of coffee will equal the world price of coffee. d. The world price of coffee does not matter; the domestic price of coffee prevails.
Suppose that the price elasticity of supply is 1.25 and the quantity supplied increases by 10%. Other things being equal, the percentage change in the price should be:
A. a 0.8% increase in the price. B. an 8% increase in the price. C. a 1.25% increase in the price. D. a 12.5% increase in the price.
If a firm sells 50 units of output at $9 per unit and 60 units of output when price is reduced to $8, its marginal revenue from selling the sixth unit is
A) $10. B) $480. C) $450. D) $30.
The total amount of satisfaction yielded by the consumption of a good or service is called
A. market equilibrium. B. total demand. C. total utility. D. maximized behavior.