Which of the following firms could raise prices and expect an increase in revenues?
(A) A firm whose product has an elasticity of 3.1.
(B) A firm whose product has an elasticity of 1.
(C) A firm whose product has an elasticity of 0.31.
(D) All firms regardless of the elasticity of their products.
Ans: (C) A firm whose product has an elasticity of 0.31.
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A) 16.66% B) 33.33% C) 45.55% D) 66.66%
Using average cost pricing, regulators of a natural monopoly
a. force the firm's economic profit to zero b. maximize the firm's economic profit c. achieve Pareto efficiency d. set price equal to cost where the LRATC curve crosses the demand curve e. set price equal to marginal cost where the MC curve crosses the demand curve
The Big Mac index uses prices of a common item to predict long-run changes in exchange rates
a. True b. False Indicate whether the statement is true or false
During the 2007-2009 recession, the consumers in the U.S. economy:
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