Refer to Figure 24.3. Which of the following statements is true about the price elasticity of demand at price P2?
A. The price elasticity is inelastic.
B. The price elasticity is zero.
C. The price elasticity is unitary.
D. The price elasticity is elastic.
Answer: C
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Scott used $4,000,000 from his savings account that paid an annual interest of 5% to purchase a hardware store. After one year, Scott sold the business for $4,100,000 . His accounting profits is:
a. $300,000 b. $100,000 c. $80,000 d. $20,000
The exit of existing firms from a competitive market will
a. increase market supply and increase market prices. b. increase market supply and decrease market prices. c. decrease market supply and increase market prices. d. decrease market supply and decrease market prices.
The Five Forces Model helps illustrate the five competitive forces that determine the ________ in an industry.
A. level of competition and profitability B. profitability and degree of product differentiation C. price and quality of output D. level of R&D and price of output