Suppose that the price of compact disks (CDs) increases, other things equal. Which of the following in the most likely effect in the market for DVDs?
a. a decrease in demand for DVDs
b. an increase in demand for DVDs
c. an increase in quantity demanded of DVDs
d. a decrease in quantity demanded of DVDs
e. a decrease in the quantity supplied of DVDs
B
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In the above figure, what is the price the firm receives if the output is 8?
A) $10 B) $2 C) $7 D) $8
An inverse relationship exists when:
a. there is no association between two variables. b. one variable increases and there is no change in the other variable. c. one variable increases and the other variable increases. d. one variable increases and the other variable decreases.
Many economists criticize monopolists because they
a. charge a price that equals marginal cost rather than a price that equals average cost. b. do not innovate. c. produce a large quantity of waste. d. produce less than the socially efficient level of output.
If in the short run the firm incurs zero marginal cost, then the firm will:
A. never shut down. B. shut down if the price is greater than the average variable cost. C. shut down if the price is less than the average total cost. D. shut down if the marginal cost equals the marginal revenue.