Suppose that the demand for coffee is inelastic. If a coffee shop decided to lower the price of coffee, total revenue would
A. stay the same.
B. be maximized.
C. decrease.
D. increase.
Answer: C
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Draw the demand, marginal revenue, and marginal cost curve for a monopolist. Show the equilibrium price and quantity supplied and total profit. Show the equilibrium price and quantity supplied and total profit.
What will be an ideal response?
Which of the following would result in a higher absolute value of the price elasticity of demand for a product?
A) The time period under consideration is short. B) The good is a necessity. C) The expenditure on the good is small relative to one's budget. D) A wide variety of substitutes are available for the good.
The contention that specific sensitive domestic technologies must not be traded freely is
A) a national defense concern. B) the infant industry argument. C) dumping. D) to protect domestic jobs.
Universal service may require making a service available in small communities where the limited scale of operations may make costs extremely high.
Answer the following statement true (T) or false (F)