Suppose two types of consumers buy suits. Consumers of type A will pay $100 for a coat and $50 for pants. Consumers of type B will pay $75 for a coat and $75 for pants. The firm selling suits faces no competition and has a marginal cost of zero. The optimal commodity bundling strategy is:
A. Charge $100 for a suit.
B. Charge $125 for a suit.
C. Charge $75 for a suit.
D. Charge $150 for a suit.
Answer: D
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The imposition of a quota on an imported good
A) shifts the demand curve down for the good. B) shifts the supply curve up for the good. C) Both A and B. D) Not enough information to determine.
A local retailer has decided to carry a well-known brand of shampoo. The marketing department tells them that the quarterly demand by an average man is: Qd = 3 - 0.25P and the quarterly demand by an average woman is: Qd = 4 - 0
5P The market consists of 10,000 men and 10,000 women. How may bottles of shampoo can they expect to sell if they charge $6 per bottle? A) 20,000 B) 33,000 C) 25,000 D) 10,000 E) none of the above
Which of the following terms is not associated with a market having a firm whose behavior has been judged to be characteristic of the dominant firm model?
a. godfather b. price leadership c. kinked demand curve d. profit maximization e. oligopoly
Answer the following questions:
a. What is the equation of exchange? Explain each component. b. What assumptions are placed on the equation of exchange to generate the quantity theory of money? c. Explain the quantity theory of money and what it implies about the impact of changes in the money supply on real output and prices.