ECO 561 Week 6 Quiz 4. Under perfect competition, a firmmaximizes its profit by setting: . P = MC because P = MR 3. If the cross-price elasticity isnegative, then the two goods are: . complements 2
ECO 561 Week 6 Quiz 4. Under perfect competition, a firmmaximizes its profit by setting: . P = MC because P = MR 3. If the cross-price elasticity isnegative, then the two goods are: . complements 2
$1 -0.25 . 1, 1. 100 10P 2 2. 3. 4. 5. 561 6 6. = A ATC B C ECO If In MC MR P QD Quiz Under Week a absolute and are: at be: because by city, competition competition, complements cross-price curve demand earn: economic elasticity example firm for gas good, goods increase increase, inelastic, is is: its large less maximizes monopolistic negative, of perfect price profit real-world revenue rise setting: stations than the then then: there total two under value will would zero –
4. Under perfect competition, a firm
maximizes its profit by setting: . P = MC because P = MR
3. If the cross-price elasticity is
negative, then the two goods are: . complements
2. If the absolute value of a demand
elasticity is less than 1, then: the demand is inelastic, and a price rise will increase the
total revenue
1. If the demand curve is QD = 100 –
10P and there is a $1 price increase, then the elasticity of demand at P = 2 is:
-0.25
ECO 561 Week 6 Quiz