The market demand for wheat is Q = 100 - 2p + 1pb, where pb is the price of barley. If the price of wheat is $2 and the price of barley is $4, the price elasticity of demand
A) equals (-4/100).
B) equals (-25).
C) equals (-1).
D) cannot be calculated without more information.
A
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Since there are no close substitutes for the monopoly's product, the monopoly can charge any price it wishes
Indicate whether the statement is true or false
In a world of perfect knowledge and communication, competitive markets, and no uncertainty,
a. there would be neither economic profits nor economic losses. b. economic profits would exist, but losses would be eliminated. c. economic profits and losses would exist to a greater degree than presently is the case. d. there would be economic profits; there is not enough information to comment on economic losses.
Refer to the above payoff matrix for the profits (in $ millions) of two firms (A and B) and two pricing strategies (high and low). Which of the following is the outcome of the dominant strategy without cooperation?
A. Both firm A and firm B choose the high price. B. Firm A chooses the high price while firm B chooses the low price. C. Both firm A and firm B choose the low price. D. Firm A chooses the low price while firm B chooses the high price.
Rachel, a large pineapple producer in Hawaii, lobbies Congress to limit imports of pineapples in order to be able to sell her pineapples at a higher price and greatly increase her income. This possible source of income inequality is due to
A) globalization. B) technology changes. C) productivity differences. D) rent seeking.