In this paperwork of ECO 561 Week 6 Quiz (6 Correct Answers) you will find the answers on the next questions:
1. The demand curve is Qo= 100 – I OP and there Is a $1 price Increase, then the elasticity of demand at P = 2 Is
Hint Calculate the quantity demanded at P = 2 and P = 3. and then apply the elasticity formula.
2. If the absolute value of a demand elasticity is less than I, then
the demand Is inelastic, and a price rise will reduce the total revenue
the demand Is inelastic, and a price rise will increase the total revenue
the demand Is elastic, and a price rise will reduce the total revenue
the demand Is elastic, and a price rise will increase the total revenue
3. If the cross-price elasticity is negative, then the two goods are
4. Under perfect competition, a firm maximizes its profit by setting
P = MC because P = MR.
P above MC where MC = MR.
P = FC.
5. A good, real-work) example for perfect competition would be
Time Warner Cable
6. A firm under monopolistic competition will earn
a positive profit because it has some monopoly power
a zero profit because it sets P = MC
a zero profit because its P = ATC
a positive profit because it sets MC = MR