A perfectly elastic demand curve implies that, ceteris paribus,
A. a firm can sell more by lowering its price.
B. the price a firm charges is irrelevant, as it will sell the same amount regardless of the price charged.
C. a firm can raise its price and not lose all its customers.
D. if a firm raises its price above the market price, quantity demanded will equal zero.
Answer: D
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The central fact of economics is
A. Production. B. Equilibrium. C. Efficiency. D. Scarcity.
Refer to Horizontal Merger. After the merger, producer's surplus is equal to
The following questions refer to the accompanying diagram, which shows the effects of a horizontal merger. Before the merger, the firm behaves competitively producing Q0 and charging P0. The merger lowers the firm's marginal cost and gives the firm enough market power to switch to the monopoly equilibrium.
a. area A + C + F.
b. area C + D + F + G.
c. area C + D + E - F - G.
d. area C + D.
How has income inequality changed in recent years? What factors account for the changes?
What will be an ideal response?
In what ways can income redistribution be viewed as a public good?
What will be an ideal response?