An auto rental company lowers the price of its rentals to increase its market share. The price cut increases quantity demanded, but total revenue decreases. This result suggests that over this price range, the demand for the auto rentals is:
A. unit elastic.
B. inelastic.
C. elastic.
D. perfectly elastic.
Answer: B
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Refer to the scenario above. The housekeeper behaves in this particular way due to the ________
A) existence of asymmetric information B) presence of a positive externality C) presence of a free-rider problem D) existence of high incentive to work
The practice of buying a firm's good in one market at a low price and selling it in another market for a higher price in order to profit from the price difference is known as
a. Predatory pricing b. Price collusion c. Arbitrage d. Mark-up pricing
The scenario in which the trade deficit slowly shrinks over time is called the
a. soft-landing scenario. b. hard-landing scenario. c. fair-trade scenario. d. free-trade scenario. e. protectionist scenario.
Who provides the primary source of funding for a program promoting forward and backward linkages in an LDC?
a. government b. entrepreneurs c. consumers d. workers e. taxpayers