ktkd

The own price elasticity of demand is equal = -3 means that:

• When price increase 1%, quantity demanded decrease 3%

• When price increase 3%, quantity demanded decrease 3%

• When price increase 1 unit, quantity demanded decrease 3 units

• When price decrease 1%, quantity demanded decrease 3%

A market has 5 firms. One of them has a market share of 50%, a second 20%, and the other three 10% each.

Which of the following statements is true?

• The 3-firm concentration ratio is 70%

• The 4-firm concentration ratio is 80%

• The market has a Herfindahl-Hirschman Index (measured from 1 to 10,000) of 3,200

• The Herfindahl-Hirschman Index of the market is lower than in a market with 5 firms with a market

  share of 20% each.

A product X has a demand function as: QD = 100 - 2P. In order to maximize the revenue, the price should be

equal:

• 20

• 25

• 30

• 50

Under perfect price discrimination:

• consumers’ surplus is zero.

• the monopolist makes zero profit

• there is excess demand

• there is a positive deadweight loss

A firm has a demand function: QD = 100 - 2P. At the price of $40, in order to increase the revenue, the firm

should:

• Decrease price, decrease quantity

• Increase price, decrease quantity

• Decrease price, increase quantity

• Increase price, increase quantity

The slope of the Iso-cost line is determined by

• Prices of the two factors

• Degree of substitutability of two factors

• Productivity of the two factors

• None of these

Which of the following forms of payment is NOT an incentive plan?

• Commission plans for salesmen

• Flat salary for a plant manager

• Bonuses for managers that increase as profits increase

• None of the statements is correct

Which of the following equations illustrates the optimal combination between 2 inputs A and B:

• MP a/A = MP b/B

• MPa = MPb

• MPa /Pa = MPb /Pb

• Both B and C

Which of the following is the best example of a perfectly competitive market?

• diamonds

• athletic shoes

• soft drinks

• farming

Under ordinary price discrimination, the monopolist charges a higher price in the market with:

• rich consumers

• unit elasticity of demand.

• lower elasticity of demand.

• higher elasticity of demand.