The price of student special decreased from €4.00 to €3.50 in the Canteen. Which of the following effects would you expect?
a) A movement along the demand curve for student special resulting in a higher price and a lower quantity demanded.
b) A movement along the demand curve for student special resulting in a lower price and a higher quantity demanded.
c) A shift in the demand curve for student special to the left.
d) A shift in the demand curve for student special to the right.
Answer: b) A movement along the demand curve for student special resulting in a lower price and a higher quantity demanded.
You might also like to view...
Two stores—Lazy Guys and Ralph's Recliners—are located in the same city
Both stores buy recliner chairs from the same manufacturer at the same price and both stores are about the same size, so that the fixed costs of production for both stores are the same. Ralph's Recliners sells more recliners per month and Ralph's has a lower average total cost of production. Which of the following can explain why the average total cost of production is lower for Ralph's Recliners? A) The rent Lazy Guys pays for its building is greater than the rent paid by Ralph's Recliners. B) Ralph's explicit costs are less because Ralph owns the land on which his building is located. Lazy Guys must make lease payments for the land on which its store is located. C) The price of recliners charged by Ralph's is greater than the price charged by Lazy Guys. D) Because Ralph's Recliners sells more output its average fixed costs are lower than Lazy Guys' average fixed costs.
Which of the following statements best describes firms under monopolistic competition?
A. There is little price or quality competition. B. The firms compete, using quality, location, advertising, and price. C. Firms do not compete using advertising. D. There is only one firm so there is no competition.
Real disposable income for a household equals
a. the real return on capital services. b. real income available after taxes. c. the nominal wage rate. d. the real return on capital services after taxes.
DeShawn's Detailing is a service that details cars at the customers' homes or places of work. DeShawn's cost for a basic detailing package is $40, and he charges $75 for this service. For a total price of $90, DeShawn will also detail the car's engine, a
service that adds an additional $20 to the total cost of the package. Should DeShawn continue to offer the engine detailing service? A) Yes, he still makes a profit by selling the engine detailing service with the basic detailing package. B) yes, but only if he raises the price of the basic detailing package C) No, his marginal benefit is less than his marginal cost. D) More information is needed for DeShawn to make this decision.