Assume that the demand curve for product C is downsloping. If the price of C falls from $2.00 to $1.75:
A. a smaller quantity of C will be demanded.
B. a larger quantity of C will be demanded.
C. the demand for C will increase.
D. the demand for C will decrease.
Answer: B
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You are a restaurant owner buying vegetables from a local farmer. You recently found out that another one of the farmer's clients, a competing restaurant has shut down, what would that do to your bargaining power?
a. Increase your bargaining power b. Decrease your bargaining power c. Not affect your bargaining power d. None of the above
If a firm's marginal revenue is below its marginal cost, an increase in production will usually
a. increase profits. b. leave profits unchanged. c. decrease profits. d. increase marginal revenue.
For the monopolistic competitor, MR = P.
Answer the following statement true (T) or false (F)
A downward shift in the Fed's policy reaction function is a ________ of monetary policy, and the aggregate demand curve ________.
A. easing; shifts right B. tightening; shifts right C. tightening; shifts left D. easing; shifts left