What is the effect in the market as more firms enter a monopolistically competitive industry?
a. The market supply curve shifts to the right.
b. The market supply curve shifts to the left.
c. The demand curve faced by each firm shifts out and to the right.
d. The demand curve faced by each firm shifts in and to the left.
Ans: d. The demand curve faced by each firm shifts in and to the left.
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Coffee and sugar are complements. If the supply curve of coffee shifts leftward because of poor weather, then there will be
A) an increase in the price of sugar. B) a decrease in the price of sugar. C) a leftward shift of the demand curve for coffee. D) a leftward shift of the supply curve for sugar.
The figure above shows the market for milk. The ________ price that producers must be offered to get them to produce 100 gallons of milk per day is ________
A) maximum; $2.50 B) minimum; $3.00 C) maximum; $4.00 D) minimum; $2.50
Risk taking
A. is economically wasteful. B. is a cause of income inequality. C. is not a cause of income inequality. D. evens out income inequality because of the bell curve.
Rania is selling boxes of cookies door to door in her neighbourhood. At a price of $10 per box she sold 40 boxes per day. When the price was reduced to $4 per box she sold 100 boxes per day. Assuming that the demand conditions were unchanged, what is the price elasticity of demand for Rania's cookies?
A) -1.7 B) 1.17 C) 1 D) 0 E) 0.85