The price of gold is volatile because the supply is highly elastic, so changes in demand have a large effect on price.

The aggregate demand curve shows that, if other factors are held constant, the higher the price level, the

A) greater the quantity of real GDP demanded. B) smaller the quantity of real GDP demanded. C) larger consumption expenditure. D) None of the above answers is correct.

This chapter explains that a firm that engages in second-degree price discrimination charges the same consumer different prices for different units of a good. You are a monopolist with many identical customers

Each will buy either zero, one, or two units of the good you produce. A consumer is willing to pay $50 for the first unit of this good and $20 for the second. You produce this good at a constant average and marginal cost of $5 . For simplicity, assume that if a consumer is indifferent between buying and not buying that he will buy. a. If you could not engage in second-degree price discrimination, what price would you charge? How much profit per customer would you earn? b. Suppose you offer your customers what seems to be a very generous deal: "Buy one at the regular price of $50, and get 60 percent off on a second." How many units of this good will each customer buy? How much profit per customer will you earn?