When a firm uses a form of quantity discrimination that charges large purchasers less it is the high quantity purchasers that generate most profit
Indicate whether the statement is true or false
False. Most profit is generated by the fact that the firm is able to charge a high price to purchasers of low quantities and cut in their consumer surplus.
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Suppose the elasticity of supply of land is 0 and elasticity of demand is 2. If the government imposes a 10 percent tax on land, then
A) buyers and sellers each pay 5 percent of the tax. B) buyers pay all of the tax. C) sellers pay all of the tax. D) sellers pay a smaller share of the tax than do buyers but both buyers and sellers pay some of the tax. E) buyers pay 1/2 of the tax.
Contractionary fiscal policy is used to decrease aggregate demand in an attempt to fight rising inflation
Indicate whether the statement is true or false
The percentage change in the quantity demanded in response to a percentage change in the price is known as the
A) slope of the demand curve. B) excess demand. C) price elasticity of demand. D) All of the above.
The Herfindahl-Hirshman Index is measured by taking ______ for each firm’s ______ summed over the firms in the industry.
a. the cube; share of market sales b. the square; total average costs c. the cube; total average costs d. the square; share of market sales