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 output power.
C. no control over the market price since the quantity demanded fell by a larger percentage than the percentage price increase.
D. some market power.
Answer: D
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What will be the principal and most immediate effect on the supply or demand for raw cotton grown in the United States if cotton-growing states experience rapid industrialization?
A) Decrease in demand B) Decrease in supply C) Increase in demand D) Increase in supply
Which of the following statements applies to a single-price monopolist?
A) In order to maximize profits, the monopolist will produce an amount of output that lies in the elastic range of its demand. B) In order to maximize profits, the monopolist will produce an amount of output that lies in the inelastic range of its demand. C) In order to maximize profits, the monopolist will produce where its demand is unit elastic. D) In order to maximize profits, the monopolist will produce an amount of output in the inelastic range of its supply.
If the market price ever drops below a firm's average variable costs at its profit-maximizing level of output the:
A. firm should shut down immediately. B. loss-minimizing quantity of output is zero. C. firm is not earning enough revenue to cover the variable costs of production. D. All of these are true.
Answer the following statements true (T) or false (F)
1. If everyone had the same income, the Lorenz curve would become the line of income equality. 2. The farther the Lorenz curve bows away from the line of income inequality, the greater is the inequality of income distribution. 3. If new, highly progressive tax laws are enacted, the resulting Lorenz curve will move to the right-hand corner of the graph. 4. A country with an equal distribution of income will have a higher standard of living than a country with a more unequal distribution of income. 5. If income were distributed solely according to productivity, some individuals would not receive any income.