What is the impact of a government subsidy to producers?
A) Less is produced relative to the efficient level, creating a deadweight loss.
B) More is produced relative to the efficient level, creating a deadweight loss.
C) Producer surplus is increased, which creates a larger consumer surplus.
D) Producers are able to sell the product at a higher price.
E) Consumers must pay a higher price for the good.
B
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If the price elasticity of demand for a good is 0.8, then a
A) 1 percent rise in the price leads to a 0.8 percent decrease in the quantity demanded. B) one dollar rise in the price leads to a 0.8 percent decrease in the quantity demanded. C) 1 percent rise in the price leads to an 80 percent decrease in the quantity demanded. D) 1 percent rise in the price leads to an 8 percent decrease in the quantity demanded.
If a firm's goal is to maximize revenue, it will price its product to correspond to the unit-elastic segment of its demand curve
Indicate whether the statement is true or false