During an economic slump such as the 2008 recession, what pricing strategies could a fast-food chain such as McDonald's use to maintain its sales? Use some of the concepts discussed in this chapter in your answer
What will be an ideal response?
Fast food firms usually face a relatively price elastic demand curve. The demand for fast food is also relatively income elastic as consumers tend to eat out less as their income falls. For firms that face an elastic demand curve, total revenues can be increased by reducing prices.
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A public good is nonrivalrous and excludable
a. True b. False Indicate whether the statement is true or false
A general rule is that an economy is experiencing a recession when
A. real GDP declines for at least three months. B. real GDP declines for at least nine months. C. nominal GDP declines for at least nine months. D. real GDP declines for at least six months.
Which of the following firms have market power?
A. private universities B. fast food chains such as McDonald's C. theme parks D. All of these have market power
The law of demand tells us that people will buy less of a good if
A. the price of that good increases. B. every factor that can affect people's buying decisions changes. C. the prices of other goods increase. D. people's income decreases.