When the demand for grapes decreases and the supply of grapes increases at the same time, we can predict that the:
a. price of grapes will fall
b. price of grapes will rise.
c. quantity of grapes exchanged will fall.
d. quantity of grapes exchanged will rise.
a
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Refer to Figure 13-5. The candy store represented in the diagram is currently selling Qa units of candy at a price of Pa. Is this candy store maximizing its profit and if it is not, what would you recommend to the firm?
A) Yes, it is maximizing its profit by charging the highest price possible. B) No, it is not; it should lower its price to Pc and sell Qc units. C) No, it is not; it should lower its price to Pb and sell Qb units. D) No, it is not; since its marginal cost is constant, it should produce and sell as much candy as it can. It should sell Qd units at a price of Pd.
A firm that produces a good with many substitutes will most likely find that:
A. lowering its price will increase total revenue. B. raising its price will increase total revenue. C. lowering its price will decrease total revenue. D. lowering its price will not affect total revenue.