In the above figure, if the price is $16, a profit-maximizing perfectly competitive firm will
A) produce 50 units.
B) produce 35 units.
C) produce 10 units.
D) choose not to produce.
B
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Bananas and apples are substitutes. When the price of bananas falls, and a technological advance in apple production occurs at the same time
A) the equilibrium price of apples rises and the equilibrium quantity of apples falls. B) the equilibrium price of apples rises and the equilibrium quantity of apples might rise or fall. C) the equilibrium price of apples rises and the equilibrium quantity of apples rises. D) the equilibrium price of apples falls and the equilibrium quantity of apples might rise or fall.
If a firm wanted to know whether the demand for its product was elastic, unit elastic, or inelastic, then the firm could
A) survey competitors and ask them what they think demand elasticity is for the product. B) not do anything as there is no way to find an elasticity value. C) change price a little bit and observe what happens to total revenue. D) talk to its customers.