What does the marginal revenue equal when a monopoly's total revenue is maximized? What is the elasticity of demand when the total revenue is maximized?
What will be an ideal response?
When the total revenue is at its maximum, the marginal revenue equals 0 and the elasticity of demand equals 1.
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At market equilibrium
A) shortages are greater than surpluses. B) surpluses are greater than shortages. C) quantity demanded equals quantity supplied. D) demand equals supply.
Price flexibility is a key feature of ________
A) traditional Keynesian theory B) new Keynesian theory C) real business cycle theory D) traditional Keynesian, new Keynesian and real business cycle theory
In the above figure, this profit-maximizing monopolistic competitive firm will realize an economic profit of
A) -$1,400. B) $2,100. C) $1,400. D) $700.
Consider two coupons: one offers 50 percent off a scarf that costs $20, and the other offers 5 percent off a jacket that costs $200. Using either coupon requires driving to the shopping mall across town. According to the Weber-Fechner law, which coupon will people tend to perceive as being more valuable?
A. Neither coupon will be of value to anyone since both require driving across town. B. They will be seen as equally valuable since both lead to a savings of $10. C. The coupon for the jacket since $200 is greater than $20. D. The coupon for the scarf since 50 percent is greater than 5 percent.