Question

At a price of $50, Gina sold 4 kisses at her charity fundraiser last week. Last night, she dropped her price to $40 and sold 5 kisses. Gina's marginal revenues are

A) $200.

B) $50.

C) $0.

D) $40.

E) $10.

Which statement is true?

A) Oligopoly demand is more inelastic than for monopoly.

B) Oligopoly demand is more elastic than for perfect competition.

C) Oligopoly usually has economies of scale.

D) Monopolistic competition elasticity of demand is closer to monopoly than to perfect competition.

E) Monopolistic competition pricing power is closer to monopoly than to perfect

When a new business enters an industry,

A) the market-clearing price falls.

B) other businesses in the industry exit.

C) economic losses decrease.

D) the market-clearing price rises.

E) economic profits increase.

Tina wants to be a rock 'n' roll singer. She cashes in all of her bank accounts that were paying her 5% interest. She takes this $2,000 and spends it to produce a CD. Tina did not quit her day job at Roots. After one year her CD sales had earned $800 in accounting profits. Tina's economic profits are

A) $100.

B) - $1,200.

C) $700.

D) $900.

E) $800.

Answer 1