If a two percent increase in the price of bananas leads to a two percent decrease in the quantity of bananas demanded, then the demand for bananas is
A) elastic.
B) inelastic.
C) unit-elastic.
D) perfectly inelastic.
Answer: C
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If a hospital is experiencing economies of scale,:
a. it should reduce its output level to lower costs. b. its average cost curve is negatively sloped as output increases. c. prices are obviously too high. d. quality is falling as output is rising. e. its average cost curve is positively sloped as output increases.
The Lorenz curve:
A. is an absolute measure of income inequality. B. is a relative measure of income inequality. C. has elements of absolute and relative measures. D. takes into account changes in the standard of living.
A single firm that charges the monopoly price in the market earns $1,300. If another firm successfully enters the market, the incumbent's profits fall to $700 and the entrant earns $575. If the interest rate is 0.5, how high must the firm's profits from limit pricing be for limit pricing to be a profitable strategy for the incumbent?
A. ?L > $500 B. ?L > $200 C. ?L > $900 D. ?L > $1,000
Marginal ________ is the added revenue from producing and selling one more unit of output.
A. revenue B. cost C. income D. profit