Your local grocery store offers a coupon that reduces the price of milk during the coming week. The regular retail price of milk in the store is $3.00 per gallon, and the coupon price is $2.00 per gallon for the next week
If the store maximizes profits and the price elasticity of demand for milk is -2 for coupon users, what is the price elasticity of demand for non-users? A) -0.67
B) -1.0
C) -1.5
D) We do not have enough information to answer the question.
C
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If a nation is running current account surpluses, then it must be:
a. Financing them with surpluses in the rest of the balance of payments. b. Running deficits in the rest of the balance of payments. c. In good economic health. d. Sliding into a recession. e. Having its central bank intervene in the foreign exchange market to lower the value of the currency.
If marginal revenue and marginal cost are not equal, profit can be maximized by
A. increasing output if MR > MC. B. decreasing output if MC > MR. C. moving to the output where the slopes of TR and TC are equal. D. All of the responses are correct.