Refer to Table 12-3. What price (P) will Arnie charge and how much profit will he earn if the market price of basketballs is $12.50?

A) Price and profit cannot be determined from the information given.
B) P = $12.50; profit = $22.50
C) P = $12.50; profit = $52.50
D) P = $20; profit = $75.00.

B

Economics

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The price of a good rises by 12 percent and the price elasticity of demand for the good is 0.85. Which of the following is a CORRECT interpretation of these facts?

A) When the price rises by 12 percent, the quantity demanded decreased by 0.85 percent. B) For each 1 percent that the price rose, the quantity demanded decreased by 10.2 percent. C) For each 0.85 percent that the price rose, the quantity demanded decreased by 1 percent. D) For each 1 percent that the price rose, the quantity demanded decreased by 0.85 percent.

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The long-run Phillips curve is vertical

a. True b. False

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