At a price of $20, a store can sell 24 picture frames a day. At a price of $18 the store can sell 33 picture frames a day. Since total revenue ________ by the price decrease, demand must be ________.
A. is increased; inelastic
B. is increased; elastic
C. is decreased; elastic
D. is increased; unit elastic
Answer: B
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Refer to Figure 24-2. Ceteris paribus, an increase in workers and firms adjusting to having previously underestimated the price level would be represented by a movement from
A) SRAS1 to SRAS2. B) SRAS2 to SRAS1. C) point A to point B. D) point B to point A.
Firms will borrow to finance capital expansion until the MRP of the investment equals the
a. MRP of labor. b. marginal cost of the finished good. c. marginal physical product of capital. d. interest payment charged for borrowing.
Over the long run, why do low-cost providers generally prevail?
What will be an ideal response?
Considering the relevant market structures, which is an INCORRECT statement?
A) In a perfectly competitive situation, there is an extremely large number of firms. B) In pure monopoly, there is only one firm. C) In monopolistic competition, there is a large number of firms. D) In any market situation, the number of firms is not very important.