Which of the following is not necessary in order for a firm to engage in price discrimination?
a. The producer must face an inelastic demand curve.
b. The producer must face a downward-sloping demand curve.
c. There must be at least two identifiable classes of consumers with different price elasticities of demand.
d. The producer must be able, at little cost, to distinguish between the different classes of buyers.
e. It must be impossible for one buyer to resell to another.
A
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If we assume perfect information, perfect mobility of resources, and no transactions costs, then there is little need for firms
a. True b. False
If interest rates in Europe fall below interest rates in the United States, then, other things equal, the demand for euros will decrease
a. True b. False Indicate whether the statement is true or false
The money multiplier equals
a. 1/R, where R represents the quantity of reserves in the economy. b. 1/R, where R represents the reserve ratio for all banks in the economy. c. 1/(1+R), where R represents the quantity of reserves in the economy. d. 1/(1+R), where R represents the reserve ratio for all banks in the economy.
You are the manager of a supermarket, and you know that the income elasticity of peanut butter is exactly ?0.7. Due to the economic recession, you expect incomes to drop by 15 percent next year. How should you adjust your purchase of peanut butter?
A. Buy 9.8 percent less peanut butter. B. Buy 10.5 percent more peanut butter. C. Buy 6.2 percent less peanut butter. D. Buy 2.14 percent more peanut butter.