Governments sometime create an excess demand for a product by setting a maximum price that is less than the equilibrium price, resulting in a permanent excess demand for the product. This is known as a price floor.
Answer the following statement true (T) or false (F)
False
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All else held constant, an increase in the price of tablets will result in a
A. decrease in the demand for tablets. B. leftward shift of the demand curve for tablets. C. movement up and to the left along the demand curve for tablets. D. rightward shift of the demand curve for tablets.
Which of the following describes the longrun situation in a monopolistically competitive market?
a. Competition drives out firms until there is only one left. b. New firms enter the market because of monopoly profits, the demand curve shifts to the left and becomes flatter, and profits disappear . c. New firms enter the market and eventually there is only one kind of product, and each firm agrees to share the profits. d. Consumers are left with no choices and no close substitutes, and firms make higher profits.
The value of the absolute price elasticity of demand for good A is 4. The absolute price elasticity for good B is 1. Which good's quantity demanded is more responsive to a change in price?
A. Good A B. Good B C. They are equally responsive. D. Not enough information is given.
Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. The economy is currently at Point B. The opportunity cost of moving from Point B to Point A is the
A. 120 LCD TVs that must be forgone to produce 20 additional OLED TVs. B. 30 LCD TVs that must be forgone to produce 40 additional OLED TVs. C. 20 OLED TVs that must be forgone to produce 30 additional LCD TVs. D. 40 OLED TVs that must be forgone to produce 120 additional LCD TVs.