If a revenue-maximizing firm is told that the price elasticity of demand is equal to one, it should:
A. raise prices 1 percent.
B. lower prices 1 percent.
C. raise prices until the elasticity becomes very high.
D. keep the price where it is.
Answer: D
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Keynes was concerned about an implication of his consumption theory: that as an economy becomes more prosperous, its saving rate becomes too ________ to sustain that prosperity. Such a long-term trend in the U.S
saving rate is ________ in the time-series data. A) large, found B) large, not found C) small, found D) small, not found
Costs that are spent and cannot be changed in the period of time under consideration are called:
A. fixed costs. B. variable costs. C. total costs. D. marginal costs.
A differentiated product is one that:
a. is slightly different from the competitor's product, although it is a close substitute. b. is very different. c. is traded within firms and is not for sale in retail markets. d. has a shelf life of less than a year.
The law of demand states that:
A. as the price of a good increases, more units are demanded. B. there is a direct relationship between the price of a good and the quantity of the good produced. C. there is a negative relationship between the price of a good and the quantity of the good demanded. D. there is an increase in the need for a good as the price of the good increases.