A market is perfectly competitive even if firms have the ability to set their own price as long as the price difference reflects differences in the product
Indicate whether the statement is true or false
False. If the market is perfectly competitive, there are no differences in the product.
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If you spend a large portion of your income on a good,
A) supply of that good would be price elastic. B) demand for that good is more elastic than if you spent a smaller portion of your income on the good. C) supply of that good is price inelastic. D) demand for that good is less elastic than if you spent a smaller portion of your income on the good. E) the good must be able to be produced at a constant (or gently rising) opportunity cost.
A decrease in demand and a decrease in supply will lead to
A) unambiguous increases in both price and quantity. B) unambiguous decreases in both price quantity. C) an unambiguous decrease in price, but the effect on quantity is indeterminate. D) an unambiguous decrease in quantity, but the effect on price is indeterminate.