If the consumer has a great deal of time to adjust to an increase in the price of gasoline, which of the following is correct?
A) Quantity demanded will be relatively sensitive to the change in price.
B) The percentage change in quantity demanded will be quite small relative to the percentage change in price.
C) The percentage change in price will be quite large relative to the percentage change in quantity demanded.
D) Demand will tend to be unitary elastic as it is for most goods in the long run.
A
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A market maker faces the following demand and supply for widgets. Eleven buyers are willing to buy at the following prices: $15, $14, $13, $12, $11, $10, $9, $8, $7, $6, $5 . Eleven sellers are also willing to sell at the same prices. What is the equilibrium price in the market without the market maker
a. $12 b. $11 c. $10 d. $9
Marginal cost regulation of a natural monopoly: a. generates economic losses for the seller
b. necessitates a subsidy payment to the firm. c. imposes a price that is less than average total cost. d. is characterized by all of the above.
In the classical model, a basic theoretical feature of self-regulating markets was that
a. unsold inventory and labor unemployment would cause prices and wages to increase. b. lower wages and prices would eliminate unemployment and unsold inventory. c. unsold inventory would never occur. d. an increase in planned saving would cause an increase in the interest rate and a decrease in investment.
In the short run, monopolistically competitive firms find their profit-maximizing quantity by setting price equal to marginal cost.
Answer the following statement true (T) or false (F)