Suppose the demand curve for medical care services is perfectly inelastic. What will happen to the equilibrium price and quantity if supply increases?
a. Price and quantity will rise.
b. Price will stay the same and quantity will rise.
c. Price and quantity will fall.
d. Price will fall and quantity will increase.
e. Price will fall and quantity will stay the same.
E
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Agave, Six Feet Under, Globe, Silk, Sotto Sotto and Zocalo are all restaurants in Atlanta. In this monopolistic market, economic profit would encourage ________, which decreases the ________ for each firm's meals
A) entry; demand B) entry; supply C) exit; demand D) exit; supply
The federal government, in order to fund expanded health care, imposes a lump-sum tax on all business property. Profit-maximizing firms that stay in business will respond by
a. raising prices to pay the tax. b. cutting output to reduce costs. c. lowering prices to stimulate demand. d. doing nothing.
Price controls are usually enacted in response to
a. popular opinion. b. governmental studies. c. scholarly research on the effects of high prices. d. laws enacted in other countries. e. All of the above are correct.
An adjustment of central parities in the EMS is called a
A) realignment. B) nominal appreciation or nominal depreciation. C) real appreciation or real depreciation. D) re-coupling. E) re-paritization.