Suppose now that a firm can change this equilibrium by charging ALL consumers (from the first to the last) a different price, which is exactly equal to each consumer's willingness to pay. Based on this information, we can conclude (choose TWO):

 The

following are the results of a survey of demand elasticity for low-calorie fruit

and vegetables:

The total

expenditure of the consumer is $80 per week. Suppose now that the price of low

calorie fruit and vegetables increases by 10%. Based on this information, we

can conclude that:

Imagine a firm in a competitive market comes up with a new production method, which halves its marginal cost at all levels of Q. Fixed costs are unaffected. Which of the following statements are true?

The

following figure depicts a firm’s profit-maximising choice at point

Hint: Use formulae for areas of rectangles and triangles! (the area of a triangle is height*base/2)

You will not be able to answer this question without first doing some careful calculations!

For those of you who like to be precise, you can ignore the complication that cars can only be sold in discrete units!

If the demand for a firm’s product is price

inelastic, this implies that

In a competitive market with free entry and exit from the market a permanent rise in

demand will lead to

Diseconomies of scale are present when...