When demand is perfectly elastic:
a. the demand curve is vertical.
b. the demand curve is horizontal.
c. consumers do not respond to price changes.
d. suppliers do not respond to price changes.
Ans: b. the demand curve is horizontal.
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Third-degree price discrimination exists when
A) the seller knows exactly how much each potential customer is willing to pay and will charge accordingly. B) different prices are charged by blocks of services. C) when the seller can separate markets by geography, income, age, etc., and charge different prices to these different groups. D) when the seller will bargain with buyers in each of the markets to obtain the best possible price.
When would you expect economic profits in an industry to be zero? a. When firms are entering the industry
b. When firms are leaving the industry. c. When existing firms are growing. d. When firms have no incentives to enter or exit.