In a market, there are many firms selling differentiated products. This market is:

The above figure shows the demand curve for movie rentals from Redbox. If Redbox raised its price from $2.50 to $3.00, between these two prices the price elasticity of demand equals

A) 1.2. B) 0.8. C) 2.0. D) 0.5.

If the Federal Reserve chooses to fight high inflation with contractionary monetary policy and firms and consumers expect this policy to reduce inflation, which of the following would you expect to see?

A) a downward shift of the short-run Phillips curve B) a decrease in the long-run aggregate supply curve C) an increase in inflationary expectations D) a reduction in the unemployment rate