A monopolist has four distinct groups of customers. Group A has an elasticity of demand of 0.8, B has an elasticity of demand of 0.9, C has an elasticity of demand of 1.0, and D has an elasticity of demand of 1.2. The group paying the highest price for the product will be
A. A.
B. B.
C. C.
D. D.
Answer: A
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When there is a building that is used for production, but no one has clear property rights to it
A) this is known as "dead capital" and causes no production. B) this is known as "dead capital" and causes efficient production. C) resources are guided to their best use by "the invisible hand." D) this is known as "dead capital" and causes inefficient production.
If a worker is temporarily laid off because the economy is in a recession
A) frictional unemployment increases. B) structural unemployment increases. C) the size of the labor force rises. D) cyclical unemployment increases.
When the cross price elasticity between good X and other related goods is positive and very low, firm X can be assumed to have:
A) minimal market power. B) moderate market power. C) a significant amount of market power. D) virtually no market power.
The Latin term "ceteris paribus" means:
A. that if event A precedes event B, A has caused B. B. that economics deals with facts, not values. C. other things equal. D. prosperity inevitably follows recession.