What affects the price elasticity of demand for a monopolist's product?
What will be an ideal response?
A monopolist may have imperfect substitutes for its product. The price elasticity of demand for the product is higher if the product has more of those imperfect substitutes or the better those products are as substitutes.
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At a price of $20, Daphne sells 35 hand-painted dog collars per week. When she raised her price to $25, she sold 28 per week. Based on this information, the demand for her dog collars is
A) perfectly elastic. B) inelastic. C) elastic. D) unit elastic.
The first fundamental theorem of welfare economics states that
A) under certain conditions, a competitive equilibrium is Pareto optimal. B) a competitive equilibrium is always Pareto optimal. C) under certain conditions, a Pareto optimum is a competitive equilibrium. D) a Pareto optimum is always a competitive equilibrium.