The law of demand implies that:
A) consumers are not responsive to price changes.
B) consumers will, all other things unchanged, buy more at lower prices.
C) sellers will, all other things unchanged, offer more on the market at higher prices.
D) sellers will, all other things unchanged, offer less on the market at lower prices.
Ans: B) consumers will, all other things unchanged, buy more at lower prices.
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Because of low unemployment rates in the country, employers offer higher wages. To meet their higher payroll costs and maintain profits, they charge consumers more for goods and services. What are the likely consequences?
(A) A wage-price spiral of ever-increasing prices. (B) Increasing numbers of people living on a fixed income. (C) Demand-pull inflation. (D) A prolonged period of deflation.
The fundamental rule of profit maximization for firms is to produce where:
a. MR = MC. b. ATC is minimized. c. quantity of output is maximized. d. price is maximized. e. total revenue is maximized.