Which of the following represents a price elastic supply?
A) The quantity demanded increases 18 percent as a result of a decrease in the price of 8 percent.
B) The price rises by 8 percent causing the quantity demanded to fall by 10 percent.
C) The quantity supplied increases by 21 percent as a result of an increase in the price of 12 percent.
D) The price rises by 22 percent causing the quantity supplied to increase by 3 percent.
C
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If people withdraw $10 million from the nation's money market mutual funds and redeposit the funds in various checkable and debitable accounts, then
A) M1 and M2 will remain unchanged. B) M1 will increase, M2 will remain unchanged. C) M1 will increase, M2 will decrease. D) M1 and M2 will increase.
The perfectly competitive firm has no influence over price because
a. its output is so insignificant relative to the market as a whole. b. anti-trust laws constrain perfectly competitive firms. c. consumers establish the prices of products. d. it doesn't know its demand curve.