The quantity of tickets demanded to the Super Bowl is always greater than the quantity supplied. Which of the following in the best explanation why the National Football League does not raise the price of tickets to the level where the quantity demanded
equals the quantity supplied?
A) Raising the price would reduce the demand for tickets; there would then be a surplus and the game would not sell out.
B) The cost of raising the price and printing new tickets would exceed the revenue the NFL would receive from higher ticket prices.
C) The demand for Super Bowl tickets is elastic; raising the price would reduce total revenue.
D) The NFL is concerned that raising ticket prices would be considered unfair.
Answer: D
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Which of the following is used to explain why a consumer's willingness to buy Microsoft Office increases as the number of other people who use Microsoft Office increases?
A) diminishing marginal utility B) market failure C) the income effect of a price change D) network externalities
The elasticity of demand for a product is likely to be greater:
A. if the product is a necessity, rather than a luxury good. B. the greater the amount of time over which buyers adjust to a price change. C. the smaller the proportion of one's income spent on the product. D. the smaller the number of substitute products available.