At $5 per cup, customers will buy 8 cups of coffee per week. At a price of $3, consumers are willing to buy 12 cups per week. The elasticity of the market demand curve for coffee between P = $5 and P = $3 (dropping all minus signs) is
A. 0.40.
B. 1.0
C. 1.25.
D. 0.80.
Answer: D
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Use the following table to answer the next question.OutputATC Plant 1ATC Plant 2ATC Plant 3ATC Plant 41,500$10$15$20$302,00081217252,50091015203,00012813183,50015611164,00018109144,50020127125,000241511105,50029191386,0003525159Plant sizes get larger as you move from Plant 1 to Plant 4. In the long run, the firm should use Plant 3's size for what level of output?
A. Less than 3,000 units B. 4,000 to 4,500 units C. 3,000 to 3,500 units D. 5,000 to 5,500 units
When firms use cost-plus pricing in a market,
a. each firm determines its price based on other firms' costs and prices. b. it may appear as though firms are colluding in price when they actually are not. c. prices of different firms diverge widely. d. each firm falls short of maximizing profit as they charge the same price irrespective of their costs. e. each firm sells only to its most-favored customer.
Economists object to monopolies on the grounds of efficiency. Why is this? Explain
________: as successive units of a variable input are added to a production process with the other inputs held constant, the marginal physical product eventually decreases
Fill in the blank(s) with correct word