If the income of buyers increases and a company maintains the same price, what is the most likely impact on quantity sold? Explain. Draw a graphical display of the result.
What will be an ideal response?
The most likely result will be an increase in demand, so that quantity will increase at all prices. The graph should look like Figure 6-5 in the text.
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If two workers can produce 22 units of output, and the addition of a third worker increases output to 30 units, the marginal product of the third worker is
a. 8 units. b. 10 units. c. 22 units. d. 30 units.
Answer the following statement true (T) or false (F)
1) If the XYZ Company can sell 4 units per week at $10 per unit and 5 units per week at $9 per unit, the marginal revenue of the fifth unit is $5. 2) Because of their large-scale level of production, pure monopolists overallocate resources to their industry by producing beyond the P = MC output. 3) Because of the ability to influence price, a pure monopolist can increase price and increase volume of sales simultaneously. 4) Natural monopoly may result where products produce substantial network effects and can be simultaneously consumed by a large number of consumers.