Market demand curves may slope downward even if some individual demand curves do not because
a. the law of demand requires that this is true.
b. lower prices may bring more purchasers into the market.
c. merchants try to sell more at lower prices.
d. people believe expensive goods are better goods.
b
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The Hound Dog Bus Company contemplates expanding its New Mexico operations by offering service from Raton to Milk-of-Magnesia. The total cost of the trip would be $400, of which $150 is fixed cost, which it has already paid. The firm expects to earn $275 in revenue from the trip. The Hound Dog Bus Co should
a. offer this service because it will earn a positive economic profit b. not offer this service because the marginal revenue is less than the marginal cost c. offer this service because the revenue exceeds fixed cost d. not offer this service because the total cost exceeds the total revenue e. offer this service because the added revenue exceeds the added cost of this service
The possibility that a borrower might engage in riskier behavior after a loan has been obtained is
A. financial intermediation. B. adverse selection. C. moral hazard. D. asymmetric information.