When there is a capacity constraint
A) firms face sunk costs when deciding whether or not to expand.
B) consumers will avoid the producer and go with a firm that has extra capacity.
C) firms are not maximizing their profits during high season.
D) firms can use peak-load pricing to increase profits during periods of high demand.
D
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The interest rate effect that helps explain the slope of the aggregate demand curve arises because
A) an increase in the price level lead to decreases in interest rates, which induces more borrowing and hence raises planned real expenditures. B) interest rates and total planned real expenditures are unrelated. C) an increase in the price level boosts interest rates, which discourages borrowing and hence reduces planned real expenditures. D) a decrease in the price level boosts interest rates, which discourages borrowing and hence frees up income for more planned real expenditures.
An electric utility is going to use a block-pricing schedule. They plan to charge P1 for the first Q1 units and P2 for the subsequent units. The units sold at P2 are the total units sold, Q2, minus the total units sold at P1
The inverse demand curve is P = $100 - Q, and the marginal and average cost is $40. Use calculus to solve for P1, P2, Q1, Q2.
"If gasoline were taxed, the price of gasoline would rise. Consequently, the demand for gasoline would fall, causing the price to fall to the original level." This statement is...
What will be an ideal response?
Suppose the U.S. dollar price of the Japanese yen decreases. Given this information, which of the following is correct?
A) The dollar has appreciated. B) The dollar has depreciated. C) The yen has appreciated. D) The yen price of the dollar decreased.