A car dealer wants to get rid of the stock of last year's model. Assume that the dealer knows from past experience that the price elasticity of demand for cars is unitary (= 1)
If the price of the cars is currently $20,000 and the dealer wants to increase the quantity demanded from 30 units to 50 units, what must the new price be if the dealer is to sell the 20 additional cars? A) $10,000
B) $12,000
C) $16,000
D) $18,000
B
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Policy activists' hope that they can undertake successful stabilization policy is ________ by the fact that natural real GDP ________ during recessions
A) improved, falls B) worsened, falls C) improved, increases D) worsened, increases
Which of the following would be most likely if firms in a competitive price-searcher market were earning economic profit?
a. Production inefficiencies would persist until the profit was eliminated. b. Firms would decrease their rate of output in the short run, causing a decline in profitability in the market. c. New firms would enter the market, resulting in fewer sales by existing firms. d. All firms in the market would continue to produce at their current levels and continue to charge the same price.
The United States financed the additional government spending during World War II through
A) an increase in the deficit. B) an increase in taxes. C) an increase in imports. D) increases in both the deficit and taxes. E) increases in both the deficit and imports.
For a monopoly, the marginal revenue curve has ________ point(s) in common with the firm's linear demand curve.
A. no B. all C. one D. indeterminate from the given information