Hotelling's model has been used to describe differentiation in the political "market." Suppose that 100 voters are evenly distributed between the extreme left and the extreme right on the political spectrum, and that all voters vote, and they always vote for the candidate closest to them on this spectrum. The numbers on this spectrum represent the number of voters lying to the left of the number. So, at the midpoint, fifty voters lie to the left and fifty to the right.
If Candidate X is running against Candidate Z, by moving to the right Candidate X would:
A. force Z to move farther to the right in order to keep the same number of votes.
B. lose some votes from voters on the far left but gain approximately the same number of votes from Z.
C. win the election if the move placed X anywhere to the right of 25 on the spectrum.
D. not lose any votes from voters on the left and gain some votes from Z.
Answer: D
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Use the figure below to answer the following question.
Refer to the three demand curves. An "increase in demand" would be illustrated as a change from
A. line A to C. B. point 4 to point 1. C. point 1 to point 2. D. line C to B.
Refer to the figure below. During high-peak times, what price-quantity combination should the firm charge to maximize profit? 
A. P4 and Q3 B. P2 and Q3 C. P1 and Q2 D. P1 and Q3