Suppose many new brands start selling coffee in an economy, increasing the options that consumers have for coffee. This will result in:
a. a decrease in the elasticity of demand for every brand of coffee.
b. an increase in the elasticity of demand for every brand of coffee.
c. zero elasticity of demand for every brand of coffee

A firm is spending the profit-maximizing amount on product development when

A) people perceive the firm's product to be better than those of its competitors. B) the marginal cost of product development is equal to the marginal revenue from product development. C) the price of the good is higher than its marginal cost. D) the advertising costs are covered. E) the firm's total revenue exceeds its total costs.

At age 40, Joe is considering quitting his job and going back for a college degree. He needs two more years full-time. Tuition is $10,000 per year. He earns $30,000 per year. A college degree would raise his annual income by $10,000 per year. He will retire at age 70. If these are real amounts (adjusted for inflation), then the discount rate to be used should be

A) the nominal rate of interest. B) the real rate of interest. C) the rate of inflation. D) zero.