Because the demand for a perfectly competitive firm's product is perfectly elastic, marginal revenue is equal to
A) one.
B) zero.
C) the price of the product.
D) negative one.
C
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The reason relative purchasing power parity (RPPP) is better at predicting exchange rates than absolute purchasing power parity (APPP) is because:
a. Actually, it is the other way around. APPP has been shown empirically and theoretically to be a more accurate way to predict exchange rates. b. APPP deals only with countries that have some sort of imbalance like hyperinflation. RPPP deals with any and all countries, which makes the job of predicting exchange rates easier. c. APPP has to begin and end in parity. RPPP just requires that the initial disequilibrium remain the same. d. APPP predictions are often biased because of central bank controls, sticky prices, and protectionism. RPPP can abstract from these problems.
When the price of NBA tickets is $25 each, 30,000 tickets are sold. After the price rises to $30 each, 20,000 tickets are sold. At the original price, the demand for NBA ticket is:
A. elastic. B. perfectly elastic. C. inelastic. D. unit elastic.