A 25% decrease in the price of breakfast cereal leads to a 20% increase in the quantity of cereal demanded. As a result:
a. total revenue will decrease
b. total revenue will increase.
c. total revenue will remain constant.
d. the elasticity of demand will increase.
a
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A change in which of the following would NOT shift the supply curve for sneakers?
A) an increase in technology for making sneakers B) an increase in the price of rubber, used to make sneakers C) an increase in the price of sneakers D) None of the above, that is, each change shifts the supply curve
In which of the following market structures is a firm most likely to advertise extensively and fear entry of new firms?
a. perfect competition b. pure monopoly c. monopolistic competition d. oligopoly e. both perfect competition and monopolistic competition
Why does the ceteris paribus assumption allow economists to focus on the variable they are interested in? Give an example.
What will be an ideal response?
Refer to the accompanying figure, which shows the annual domestic supply and annual domestic demand for jeans in a small country.
Suppose this country is open to trade with the rest of the world, and the world price of a pair of jeans is $40. If the government imposes a quota on imported jeans of 12,000 pairs per year, then the new equilibrium price of jeans in this country will be:
A. $80 B. $60 C. $120 D. $100