The elasticity of supply of product X is unitary if the price of X rises by:
A. 5 percent and quantity supplied rises by 7 percent.
B. 8 percent and quantity supplied rises by 8 percent.
C. 10 percent and quantity supplied stays the same.
D. 7 percent and quantity supplied rises by 5 percent.
Answer: B
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Indicate whether the statement is true or false
Refer to the scenario above. What is likely to be the impact on Firm A's sales if Firm A decides to sponsor the event while Firm B decides not to sponsor the event?
A) A 5% increase in sales B) A 2% increase in sales C) A 7% increase in sales D) A 0% increase in sales
Suppose Always There Wireless serves 100 high-demand wireless consumers, who each have a monthly demand curve for wireless minutes of QdH = 200 - 100P, and 300 low-demand consumers, who each have a monthly demand curve for wireless minutes of QdL = 100 - 100P, where P is the per-minute price in dollars. The marginal cost is $0.25 per minute. Suppose Always There Wireless charges $0.35 per minute. If Always There Wireless charges the highest fixed fee that it can without losing the low-demand consumers, what is Always There Wireless's profit from sales for each low-demand consumer?
A. $27.63 B. $37.63 C. $21.13 D. $28.13
The long-run supply curve for a competitive industry
a. may be horizontal if entry into the industry lowers average total cost. b. may be upward-sloping if higher-cost firms enter the industry. c. will be horizontal if there is free entry into the industry. d. will be upward-sloping if there are barriers to entry into the industry.