The authors explain that the marginal cost of production does not have to be constant in order to maximize profits under intemporal price discrimination
Which of the following is NOT an example of changing marginal costs under profit-maximizing intertemporal price discrimination? A) Marginal cost increases sharply after the initial marketing stages when the product is sold to the broader market of consumers.
B) Marginal costs decline over time due to learning-by-doing.
C) Marginal costs decline over time because the producer sells less expensive versions of the product in later stages of marketing (e.g., hard-cover versus paper-cover books).
D) Marginal costs decline over time due to economies of scale.
A
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If the Fed were to reduce the legal reserve ratio, we would expect:
A. lower interest rates, an expanded GDP, and a higher rate of inflation. B. lower interest rates, an expanded GDP, and a lower rate of inflation. C. higher interest rates, a contracted GDP, and a higher rate of inflation. D. higher interest rates, a contracted GDP, and a lower rate of inflation.
Total revenue will decrease when
A. the price elasticity of demand equals 1.20 and price rises. B. price and quantity change in opposite directions. C. the price elasticity of demand is negative. D. the price elasticity of demand equals 1.00 and price falls.