Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is Qd = 20,000 - 200P where P is the price of a cubic yard of concrete and Qd is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. Suppose Kate enters the market first and chooses her output before Alice. What is the difference in Alice's profit when Kate enters the market first, compared to when they simultaneously select their outputs?
A. When Kate enters the market first, Alice's profit is $13,333.33 lower.
B. When Kate enters the market first, Alice's profit is $5,000 lower.
C. When Kate enters the market first, Alice's profit is $1,111.11 higher.
D. When Kate enters the market first, Alice's profit is $3,888.89 lower.
D. When Kate enters the market first, Alice's profit is $3,888.89 lower.
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Government assistance to the poor in the United States
A. has eliminated poverty in the nation. B. is available to all persons whose income is below the poverty income threshold. C. is available in most cases only to the poor who are elderly, disabled, or families with children. D. is always in the form of cash.
The elasticity coefficients of demand are 2.6, 0.5, 1.4, and 0.18 for demand schedules D1, D2, D3, and D4, respectively. A 2 percent price increase will result in an increase in total revenues in the cases of:
A. D1 and D3. B. D2 and D4. C. D1, D2, and D3. D. D1 and D4.
Restaurants and retail stores often give 10% senior citizen discounts. Use the concept of elasticity to explain how this can be profit maximizing behavior.
What will be an ideal response?
Consumption spending is $4.5 billion, gross private domestic investment is $3 billion, and government purchases are $2 billion. If GDP is $14 billion, which of the following could be true regarding exports and imports in the economy?
A) Exports are $4.5 billion, and imports are $2 billion. B) Exports are $6 billion, and imports are $8.5 billion. C) Exports are $9 billion, and imports are $6 billion. D) Exports are $15 billion, and imports are $10.5 billion.