Homogeneous products are indistinguishable from each other.
Answer the following statement true (T) or false (F)
True
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Which of the following is correct about a consumer's optimization problem:
A. In order for a consumer to not be optimizing at a corner solution, it is necessary for us to assume that all goods are essential. B. In order for a consumer to not be optimizing at a corner solution, it is sufficient for us to assume that all goods are essential. C. In order for a consumer to not be optimizing at a corner solution, it is necessary and sufficient for us to assume that all goods are essential. D. None of the above.
If somebody posing as a vacationer were able to purchase large numbers of airline tickets from the airlines and later resell them to business travelers,
A) group price discrimination on the part of airlines would no longer be profitable. B) group price discrimination on the part of airlines would no longer be profit maximizing. C) the airlines would respond by raising further the price charged to business flyers. D) this person would not earn any economic profit.
Which one of the following is not a danger of experimenting with pricing for an oligopoly?
A. Firms matching price reductions. B. The uncertainty of competitor response. C. Product differentiation. D. Retaliation.
Suppose the quantity demanded of ice cream cones increases from 400 to 425 cones a day when the price is reduced from $1.50 to $1.25. In this situation, the elasticity of demand, calculated using the average method, is
A. 1. B. 0.33. C. 1.33. D. 3.