How can the market demand for a product be inelastic but the demand for a particular firm is elastic?
A) There is no advertising.
B) There is a sufficiently large number of sellers.
C) There is only one or two sellers.
D) Buyers do not have complete information.
B
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Which of the following industries most closely approximates the oligopoly model?
a. dry cleaning b. fast food c. automobile manufacturing d. agricultural produce
An excise tax levied on a product will impose a larger relative burden on consumers (and a smaller relative burden on sellers) when
a. the supply of the product is relatively inelastic. b. the supply of the product is relatively elastic. c. the demand for the product is relatively inelastic. d. either b or c is true
Figure 9.9 depicts a market for electricity. S1 is the supply curve without the external costs. S2 is the supply curve with the $T tax. Assume electricity production incurs external costs. If the government imposes a pollution tax of $T per mega watt:
A. the equilibrium price of electricity increases but the equilibrium output decreases. B. the equilibrium price of electricity decreases but the equilibrium output increases. C. both the equilibrium price and output increase. D. both the equilibrium price and output decrease.
The problem with the way people used Napster, Kazaa, and other music download services is that they violated the monopoly that is legally granted to
A. holders of copyrights. B. consumers of music. C. holders of patents. D. all artists.