In a study session, your friend says, "Demand is elastic if the percentage change in the price exceeds the percentage change in quantity demanded." Is your friend correct?
What will be an ideal response?
No, your friend is incorrect. Demand is elastic if the percentage change in the price is less than the percentage change in the quantity demanded.
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Using the figure above, show the effect on the real interest rate and the quantity of loanable funds of an increase in expected profit
What will be an ideal response?
The typical average cost curve
A. continually declines as output increases. B. is horizontal. C. continually increases as output increases. D. first declines to a minimum and then increases as output increases.
Suppose the demand for Pepsi is qp = 50 - 2pp + 1pc. The firm faces a constant marginal cost of m, and denotes the price of Coke
Assuming Bertrand behavior, derive Pepsi's best-response function and explain how the firm changes price in response to changes in its own marginal cost and changes in Coke's price.
The demand curve any monopolist uses in making output decisions is:
a. the same as the demand curve facing a perfectly competitive firm. b. vertical, because there are no close substitutes for its product. c. horizontal, because there are no close substitutes for its product. d. the same as the market demand curve. e. perfectly inelastic.