A firm that faces a high-demand period followed by a low-demand period must determine all of the following for peak-load pricing except which one?
A) long-term peak quantity
B) long-run capacity
C) short-term off-peak price
D) short-term peak price
A) long-term peak quantity
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The "interest rate effect" can be described as an increase in the price level that raises the interest rate and chokes off
A) investment and consumption spending. B) government spending. C) government spending and unplanned investment. D) net exports.
A 10 percent increase in the price of root beer causes a 5 percent increase in the quantity demanded of orange soda. This means that
a. root beer and orange soda are substitutes b. root beer and orange soda are complements c. the cross-price elasticity of demand is elastic d. the cross-price elasticity of demand is equal to 2 e. the cross-price elasticity of demand is equal to -2