Which good would you expect to have a greater price elasticity: a gallon of gasoline sold at a specific gasoline station on Main Street in Phoenix, a gallon of gasoline sold in Phoenix, or a gallon of gasoline sold in Arizona? Why?
What will be an ideal response?
A gallon of gasoline sold at a specific station on Main Street in Phoenix, because there are more substitutes for that good than the others.
Economics
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A monopoly is a seller of a product
A) with a perfectly inelastic demand. B) without a well-defined demand curve. C) with many substitutes. D) without a close substitute.
Economics
Assume that a firm's marginal cost is $10 and the elasticity of demand is -2. We can conclude that the firm's profit maximizing price is approximately
A) $20. B) $5. C) $10. D) The answer cannot be determined without additional information.
Economics