Which of the following products has the most elastic demand?
A. Raspberry Mocha Kona coffee blend at Starbuck's
B. Starbuck's coffee
C. coffee
D. all beverages
Answer: A
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BOGOs, i.e., buy-one, get-one-free offers, are an example of third-degree price discrimination
Indicate whether the statement is true or false
A firm has positive fixed cost and positive variable cost. At its current level of output, marginal cost equals average cost. The firm must
A. not be producing at its profit-maximizing level of output. B. be producing the quantity that minimizes average cost. C. be operating at a point at which total variable cost equals total fixed cost. D. be earning negative profit.
Consumer surplus is the difference between what you would have _________________ and what you _____.
Fill in the blank(s) with the appropriate word(s).
Which of the following will cause the consumption schedule to shift upward?
a) an increase in the amount of consumer indebtedness b) a reduction in the wealth or assets held by consumers c) an expectation in future declines in the consumer price index d) an expectation of future shortages of essential consumer goods e) a growing belief that personal income will decline in the future