Which of the following statements is not true?
a. Price elasticity of demand for basic foods is low.
b. When price elasticity of demand is very high, we say there is brand loyalty.
c. The availability and price of substitutes affect the elasticity of demand for a good or service.
d. When goods have very low prices, the elasticity of demand is usually quite low.
e. Elasticities increase as the price of the good increases.
b
You might also like to view...
Consider two Cournot competitors selling complementary goods with demand curves given by:
p1 = 100 - q1 + .5q2 p2 = 100 - q2 + .5q1 Suppose each firm has a marginal and average cost of $10. a. What about the demand equations indicate that these goods are complements? How do they differ from the standard Cournot model? b. Find the equilibrium prices and quantities. c. Suppose the two firms merge. By doing so, the newly merged firm will act to maximize the joint profits ((q1,q2 ) = 1(q1,q2 ) + 2(q1,q2 )). Find the joint-profit maximizing price and quantities. d. Are the combined profits greater or smaller from merging? That is, is merging profitable for the firms? e. Are consumers better or worse off with the firms merging? How does this compare to the mergers of Cournot competitors selling substitutes? What does this imply about antitrust policy towards mergers of firms selling complementary goods (such as airplanes and engines, computers and processors, cars and tire companies, etc).
Which one of the following would shift your consumption function in an upward direction?
A) an increase in your wealth B) a decrease in your wealth C) an increase in your real disposable income D) a decrease in your real disposable income
A bank's capital is: a. the value of all its assets, including loans
b. the value of all its assets, excluding loans. c. the value of its physical plant, including buildings, computers, and automatic teller machines. d. the difference between its assets and liabilities.
Game theory applies to problems that arise in
a. perfect competition. b. monopolies. c. oligopolies. d. pure competition.