Given a demand curve, explain how total revenue may be calculated
A demand curve consists of the prices and corresponding quantities demanded at those prices. Total revenue is price times quantity demanded. Therefore, total revenue is the area of a rectangle formed under the demand curve by the choice of any price-quantity combination.
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Oligopolies are difficult to analyze because
A) oligopolies are a recent development so economists have not had time to develop models. B) demand and cost curves do not exist for these types of industries. C) the firms are so large. D) how firms respond to a price change by a rival is uncertain.
In a coin toss bet, where both heads and tails are equally likely, you win a dollar on heads but lose a dollar on tails. The expected value of the bet is
a. $0.50 b. -$0.50 c. $1.00 d. $0.00