Suppose it costs Minnie's Mini-Golf (a monopolist) not a penny more to let another person on the course. If Minnie's faces a linear (downward-sloping) market demand curve, it will maximize profit by choosing the point on the demand curve at which
a. marginal revenue is greatest
b. price elasticity is unit elastic
c. price elasticity is inelastic
d. price exceeds average total cost by the greatest amount
e. price exceeds marginal cost by the greatest amount
B
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Looking at the historical values for annual inflation in the United States as measured by the Consumer Price Index, it is clear that inflation was
A) higher on average during the 1990s than during the 1970s. B) higher on average during the 2000s than during the 1970s. C) never less than 0 percent at any time during the last 50 years. D) higher on average during the 1970s than during the 1980s. E) was never greater than 10 percent at any time during the last 50 years.
What does a budget constraint represent? How do budget constraints explain the trade-offs that consumers face?
What will be an ideal response?