Consider the demand curve below. If area 0ABC is smaller than area 0DEF, it suggests that if the price increases from D to A, then total revenues of sellers will:
A. Increase
B. Decrease
C. Remain constant
D. Equal zero
B. Decrease
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During the winter of 2011-2012, the price of fuel oil increased enormously but the quantity demanded decreased only a little. This response indicates that the demand for fuel oil was
A) inelastic. B) elastic. C) unit elastic. D) perfectly elastic. E) perfectly inelastic.
An illustration of a non-credible commitment is the promise
a. to not increase capacity in a declining industry b. to match a new entrant's discount price c. to enter a profitable industry d. to restrain output to the quota assigned by a cartel e. to exit in the face of projected losses.
Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; potential C. higher; higher D. lower; higher
McDonald's is a fast-food restaurant chain. Which of the following would be a long-run decision for McDonald's?
A) open a new restaurant in a city B) hire one more worker in a restaurant location C) supply more hamburgers in one restaurant D) replace the manager of a restaurant