The figure illustrates the market for pens. The equilibrium quantity is
A) between 400 and 600 pens, but it is impossible to be precise.
B) 5 pens a month.
C) 2 pens a month.
D) 500 pens a month.
D
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The table above gives the demand schedule for peas. Which of the following statements CORRECTLY describes the price elasticity of demand?
A) The price elasticity of demand is larger at point A than at point B. B) The price elasticity of demand is larger at point D than at point A. C) The price elasticity of demand is constant because the slope is constant. D) The price elasticity of demand increases moving from point A to point B to point C to point D to point E.
In the Brander-Spencer model the subsidy raises profits by more than the subsidy because of
A) the "multiplier" effect of government expenditures. B) the military-industrial complex. C) the forward and backward linkage effects of certain industries. D) the deterrent effect of the subsidy on foreign competition. E) the economies of scale once the company enters the market.