The Wall Street Journal magazine offers a significant discount to students who purchase a one-year subscription. If the reason for the discount is price discrimination, we can conclude that:
A. students have a less elastic demand for newspapers than does the general public.
B. there is no difference between a student's elasticity of demand for newspapers and any other person's elasticity of demand.
C. students have a more elastic demand for newspapers than does the general public.
D. students have a perfectly inelastic demand for newspapers.
Answer: C
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Negative externalities and the tragedy of the commons are problems that have a common source. What is this common source?
A) a lack of competition B) self-interest motives of producers and consumers C) a lack of clearly-defined and enforced property rights D) an overabundance of resources
Suppose a perfectly competitive increasing-cost industry is in long-run equilibrium when market demand suddenly decreases. What happens to the industry in the long run?
a. It experiences no change from the original equilibrium b. It experiences a higher equilibrium price and produces less output c. It experiences a lower equilibrium price and produces less output d. It experiences the same equilibrium price but produces more output e. It experiences the same equilibrium price but produces less output