A kinked demand curve is perceived by the firm as being:
A. more elastic to the right of the kink
B. more inelastic to the right of the kink
C. more inelastic to the left of the kink
D. present when there is a monopoly
Answer: B
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If a firm in a perfectly competitive market faces the cost curves in the graph shown, which of the following is true? The firm:
A. if it produces at profit-maximizing level of output it will make positive profits when price is higher than $15.
B. if it produces at profit-maximizing level of output it will make positive profits when price is higher than $11.
C. should always produce at least 43 units in order to maximize profits.
D. will shut down if market price is below $15, but above $11.
Refer to Figure a. Assuming the solid line in the graph is a constant expected consumption line where ? (the probability of state S) = 0.50, which constant expected consumption line reflects an increase in ??
A. The dotted line
B. The dashed line
C. An increase in ? does not result in a change in the expected consumption line.
D. A change in ? results in a parallel shift in the expected consumption line, so neither the dotted nor the dashed line reflects this change.
Diminishing returns set in with the _____ worker.
When comparing a? $100 billion increase in government expenditure to a? $100 billion decrease in tax? revenue, the effect of the increase in government expenditure on aggregate demand is
A) greater than the effect of the tax decrease.
B) equal to the effect of the tax decrease.
C) less than the effect of the tax decrease.
D) positive whereas the effect of the tax decrease is negative.
E) negative whereas the effect of the tax decrease is positive.