Elite Astin-Martin Cars offers its customers a fancy showroom and a knowledgeable sales force. If Astin-Martins Are Us opens an outlet nearby, offering cut rate prices and little service, then Elite Astin-Martin Cars will likely find
a. more customers attracted to buying Astin-Martins and its sales will increase.
b. more customers visiting its showroom, but lower sales.
c. fewer customers visiting its showroom and lower sales.
d. fewer customers visiting its showroom but more of them making a purchase.
b. more customers visiting its showroom, but lower sales.
You might also like to view...
A firm that is earning zero economic profit should go out of business.
Answer the following statement true (T) or false (F)
Nine friends who love the beach decide to pool their financial resources and equally share the cost of a one-week house rental on Nantucket. Suppose that the beach outside of the house becomes more congested when the nine additional people join the other beachgoers. Which of the following statements is not correct?
a. Use of the beach by the nine new beachgoers will yield a negative externality. b. The town can reduce the congestion externality by raising the fee to access the beach. c. An increase in the fee to access the beach could be viewed as a corrective tax on the externality of congestion. d. Each of the nine friends would have been better off staying at home.
According to the theory of "money neutrality" which of the following statements is likely to be true?
What will be an ideal response?
Sketch graph a natural monopoly like a city transportation subway with the typical ATC, MC, and demand and MR functionsA. Label the profit maximizing monopoly price with a P1.B. Label the typical public utility commission regulated price which requires no subsidy as P2.C. Label the socially efficient price as P3.D. Shade in the area of the subsidy required in one of the cases above.E. Explain why a subsidy is often used for public transportation but not for municipal water supply.
What will be an ideal response?