A coffee manufacturer raises the price of its coffee by 10%, and the quantity demanded of its coffee falls by only 12%. This firm has
A. not been able to prevent its competitors from competing with it on price.
B. some market power.
C. some output power.
D. no control over the market price since the quantity demanded fell by a larger percentage than the percentage price increase.
Answer: B
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When a simple monopolist chooses to sell an additional unit of a good or service
a. marginal revenue will be equal to the going market price. b. marginal revenue will always be negative. c. it will only have to lower its price on the additional unit. d. it will have to lower its price on the additional unit and on all other units.
When the expenditure schedule is too low, the result is a(n)
a. unemployment surplus. b. inflationary gap. c. recessionary gap. d. budgetary gap.
Suppose the demand function is given by Qxd = 8Px-0.5 Py0.25 M0.12 H. Then the demand for good x is:
A. unitary. B. perfectly elastic. C. inelastic. D. elastic.
If a buyer in an economic transaction has more information than the seller, the buyer benefits at the expense of the seller. This phenomenon is due to
A) moral hazard. B) adverse selection. C) economically irrational behavior. D) gains from trade.