If the demand decreases in a perfectly competitive market, firms will likely:
A. experience negative profits in the short run.
B. experience zero profits in the long run.
C. exit the market in hopes of capturing profits elsewhere.
D. All of these are true.
D. All of these are true.
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The data in the table above give two points on the demand curve for pizza. Using the midpoint method, when the price of a pizza falls from $10 to $9, what is the percentage change in the quantity demanded?
A) 22.2 percent B) 10.0 percent C) 15.5 percent D) 5.2 percent E) 25 percent
Suppose you see a 2006 Scion xB Sport Wagon advertised in the local newspaper for $8,500. If you knew the car was reliable, you would be willing to pay $10,000 for it
If you knew the car was unreliable, you would only be willing to pay $5,500 for it. Under what circumstances should you buy the car?