The sensitivity of the change in quantity consumed of one good to a change in the price of a related good is called
A) cross-elasticity.
B) substitute elasticity.
C) complementary elasticity.
D) price elasticity of demand.
A
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Assuming the economy in the graph shown is currently at equilibrium A, we can conclude:
A. the economy is in a recession.
B. the economy is producing less than its potential level of output.
C. there must be unemployment of resources.
D. All of these are true.
The slope and location of the demand curve depend on:
A) the number of buyers. B) production costs. C) the number of producers. D) all of the above.
Under the conditions of monopolistic competition:
A. firm profits are higher in the long run than in the short run. B. average costs of production are the same in the short run as they are in the long run. C. economic profit is zero in the long run. D. price equals marginal cost.