When a firm is on the inelastic segment of its demand curve, it can:
A. increase total revenue by reducing price.
B. decrease total costs by decreasing price.
C. increase profits by increasing price.
D. increase total revenue by more than the increase in total cost by increasing price.
Answer: C
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According to this Application, from the early 1990s until quite recently, the U.S. economy grew. This growth in the U.S economy
A) decreased foreign investment in the U.S. B) decreased imports to the United States. C) caused the level of U.S. exports to decline. D) increased the U.S. demand for foreign products.
The curve that shows alternative combinations of the price level and real income that result in equilibrium in both the real goods and the money markets is called the:
A) aggregate demand curve. B) short-run aggregate supply curve. C) long-run aggregate supply curve. D) none of the above.