A firm that produces a good with many substitutes will most likely find that:
A. raising its price will increase total revenue.
B. lowering its price will not affect total revenue.
C. lowering its price will increase total revenue.
D. lowering its price will decrease total revenue.
Answer: C
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The cross-price elasticity of demand measures how sensitive purchases of a specific product are to changes in
A. the price of that same product. B. the price of some other product. C. the general price level. D. income.
If a buyer enjoys a consumer surplus of $25 when he purchases a good for $50, his willingness to pay for the good is ________
A) $2 B) $25 C) $50 D) $75
A strategy in which a player uses probabilities to decide which strategy to use is called a
A) pure strategy. B) mixed strategy. C) Pareto strategy. D) coin flip strategy.
Inventory reductions are a signal indicating that
a. the economy is close to disaster. b. the Dow Jones Industrial Average will fall. c. manufacturers need to increase production. d. All of the above are true.