In a dynamic economy under ideal conditions,
a. the unemployment rate should be near zero.
b. some unemployment would be present due to workers temporarily being out of work while changing jobs.
c. unemployment would tend to move upward slightly as prices increased.
d. unemployment would tend to move slightly downward as unemployment compensation benefits increased.
B
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Pizza Hut lowers the price of its pizza. The price elasticity of demand for Pizza Hut pizza equals 0.3. What happens to the Pizza Hut's total revenue?
A) nothing B) It increases. C) It decreases. D) It becomes negative. E) It might change, but more information is needed to determine if it increases, decreases, or does not change.
Amy runs a business in a market where all firms are price takers. Bill suggests that she lower her price to attract even more business. Should Amy follow Bill's suggestion, or should she even consider raising her price?