Consumers demand different features from cough medications taken for daytime use versus nighttime use. Drug companies conveniently package both medications together. This strategy is designed to
a. Allow consumers to buy the two together
b. Stop consumers from buying each medicine separately
c. Make the consumers more homogenous so that maximum consumer surplus can be extracted with a single price
d. None of the above
c
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Assume the following cost information about Fred's widget company: Its fixed cost is $27, and its total variable cost is $18 for 1 unit; $33 for 2; $45 for 3; $60 for 4; and $78 for 5 . Given this information: a. average fixed cost rises from an output of four to an output of five
b. average fixed cost is greater than marginal cost for the second unit produced. c. the output level which minimizes average total cost is four units. d. average variable cost rises, but average total cost falls, as output increases from four to five.
In a competitive market, if buyers did not know all the prices charged by the many firms,
A) all firms still face horizontal demand curves. B) firms sell a differentiated product. C) demand curves can be downward sloping for some or all firms. D) the number of firms will most likely decrease.
Figure 4.2 illustrates the supply and demand for t-shirts. If the actual price of t-shirts is $15, there is an
A) excess supply of 10 t-shirts. B) excess supply of 8 t-shirts. C) excess demand of 8 t-shirts. D) excess demand of 10 t-shirts.
If the price of apples is on the vertical axis and the quantity of apples demanded is on the horizontal axis, the slope between two points on the line describing the relationship between price and quantity is
A) the change in price multiplied by the change in quantity. B) the change in price divided by the change in quantity. C) the change in quantity divided by the change in price. D) price divided by quantity.