Depositors lack of information about the quality of bank assets can lead to

Refer to Figure 15-1. Which of the following statements about the firm depicted in the diagram is true?

A) The fact that this firm is a natural monopoly is shown by the long-run average total cost curve still falling when it crosses the demand curve. B) The fact that this firm is a natural monopoly is shown by the continually declining market demand curve as output rises. C) The fact that this firm is a natural monopoly is shown by the fact that marginal cost lies below the long-run average total cost where the firm maximizes its profits. D) The fact that this firm is a natural monopoly is shown by the continually declining marginal revenue curve as output rises.

If quantity demanded for sneakers falls by 10 percent when price increases 25 percent, we know that the absolute value of the own price elasticity of sneakers is:

A. 2.5. B. 0.27. C. 2.0. D. 0.4.