Dell Computers allows potential consumers to customize personal computers to their desires. Dell's strategy is successful because offering bundles that more exactly meet a consumer's preference allows Dell to extract more consumer surplus
Indicate whether the statement is true or false
FALSE
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A decrease in the rental rate of capital can lead to a long run increase or decrease in the number of firms in the industry.
Answer the following statement true (T) or false (F)
Consider the market for bicycles. If a dealer cuts prices by 10 percent and sells 20 percent more bikes, then demand for bicycles is:
a. inelastic, and total revenue will increase. b. elastic, and total revenue will increase. c. inelastic, and total revenue will decrease. d. elastic, and total revenue will decrease. e. unit elastic, and total revenue will remain the same.
Which of the following is evidence of an ineffective cartel?
a. Output changes are dictated by changes in demand. b. Price changes are dictated by changes in demand. c. Members do not agree on output quotas. d. All of these.
Suppose the MPC is 0.8 in Canada and the MPC of Home goods is 0.55. If income increases by $100 million in Canada, then the increase in consumption of domestic goods will be:
a. $25 million. b. $80 million. c. $55 million. d. $35 million.