Suppose Microsoft announces it is cutting the prices of some of its software titles (mainly games) by 25 percent. Assuming that Microsoft is seeking to increase revenues, it must believe that the elasticity of demand for these products is
a. elastic.
b. inelastic.
c. of unitary elasticity.
d. perfectly inelastic.
A
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Which of the following conditions does not need to be satisfied in order to practice price discrimination?
a. a perfectly elastic demand curve b. a negatively-sloped demand curve for the firm's output c. the ability to identify customers who are willing to pay more for the good d. the ability to identify customers who are not willing to pay more e. the ability to prevent resale of the good
Historically, velocity has been:
A. relatively stable, though the Great Depression of the 1930s caused some significant fluctuations. B. in sync with the business cycle, increasing during times of decline and increasing with recovery. C. relatively stable, though the recent crisis has temporarily caused some significant changes. D. in sync with the business cycle, slowing during times of decline and increasing with recovery.