Suppose there are 100 identical firms producing package delivery services. One of the firms finds that when it has to pay a wage rate of $7, it hires 20 delivery people. The firm charges an average price of $10 to deliver a package. From this information, we know that the package delivery industry is hiring a total of:
a. 100 workers.
b. 200 workers.
c. 700 workers.
d. 2,000 workers.
e. 10,000 workers.
d
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If the demand curve for comic books is expressed as Q = 10,000 * p-1, then demand has a unitary elasticity
A) only when p = 10,000. B) only when p = 100. C) always. D) never.
During the production process Ajax Corporation releases pollution into the air. Ajax Corporation operates in a monopolistic competitive industry. Which of the following statements addresses the pollution situation?
A) Ajax is taking advantage of asymmetric information. B) This is an example of a market failure and is a reason for the government to regulate the industry. C) The quality of the product could be improved if the amount of pollution can be reduced. D) This is known as the lemons problem.