Which of the following examples shows how advertising can create greater elasticities of demand?
a. Ads claim that one cell phone is by far better than all the competitors’ cell phones.
b. Ads show that most car companies reduce prices for their products during the fall.
c. Ads show how several paper towel brands are better than the established paper towel brand.
d. Ads reveal how a particular brand of detergent is inferior.
c. Ads show how several paper towel brands are better than the established paper towel brand.
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Owning a patent can provide a firm with monopolistic power
a. True b. False Indicate whether the statement is true or false
According to the Latin phrase ceteris paribus:
a) Nothing else changes. b) Things do not remain equal. c) Resources are limited. d) There is no government intervention.
The formal definition of price elasticity of demand is
A) change in quantity demanded divided by change in price. B) quantity demanded divided by price. C) percentage change in quantity demanded divided by percentage change in price. D) quantity demanded multiplied by price and divided by 100.
Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher