Jenny sells lemonade in front of her house in the summer. Several other kids in Jenny's neighborhood also run lemonade stands in the summer. The lemonade market in Jenny's neighborhood is more likely to be perfectly competitive if:
A. each lemonade stand sells the same kind of lemonade.
B. some of the neighborhood parents build elaborate booths for their kids' stands while some kids sell from makeshift tables.
C. each stand tries to get more customers by offering different varieties of lemonade and snacks.
D. all of the kids advertise heavily.
Answer: A
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Refer to the figure above. What is the consumer surplus after Lithasia opens up to free trade?
A) $1 B) $12 C) $15 D) $32
Molly received an autographed poster of David Hasselhoff for her 21st birthday
Her friend Helga offered her $50 for the poster, but Molly refused to sell the poster even though she knows she would never pay that much to replace it if it was ever damaged or destroyed. Explain this inconsistency in Molly's behavior.