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Questions and Answers
What can be said about the relationship between price and quantity demanded according to the text?
What can be said about the relationship between price and quantity demanded according to the text?
- Price and quantity demanded have a direct relationship.
- Price and quantity demanded are unrelated.
- Price and quantity demanded have an inverse relationship. (correct)
- Price has no effect on quantity demanded.
Why is the marginal revenue due to the third unit not equal to the price at which the third unit is sold according to the text?
Why is the marginal revenue due to the third unit not equal to the price at which the third unit is sold according to the text?
- Marginal revenue is always equal to the price of the product.
- Two units sold earlier at a higher price lead to a loss when the price is reduced for the third unit. (correct)
- Marginal revenue increases as price falls.
- Selling more units at a lower price results in higher overall revenue.
How can marginal revenue be expressed according to the text?
How can marginal revenue be expressed according to the text?
- MR = q/dTR
- MR = TR - q
- MR = dTR/dQ (correct)
- MR = TR + q
What is the relationship between marginal revenue and average revenue in a falling average revenue schedule?
What is the relationship between marginal revenue and average revenue in a falling average revenue schedule?
In what scenario is the marginal revenue equal to average revenue according to the text?
In what scenario is the marginal revenue equal to average revenue according to the text?
What does dTR/dQ indicate according to the text?
What does dTR/dQ indicate according to the text?
How is total revenue affected by a falling average revenue schedule?
How is total revenue affected by a falling average revenue schedule?
Why does marginal revenue become negative after reaching zero according to the text?
Why does marginal revenue become negative after reaching zero according to the text?
What would happen to the overall revenue if a company sells all its units at a price lower than the average revenue according to the text?
What would happen to the overall revenue if a company sells all its units at a price lower than the average revenue according to the text?
How is marginal revenue impacted when a firm sells two units at a higher price and then lowers the price significantly for subsequent units according to the text?
How is marginal revenue impacted when a firm sells two units at a higher price and then lowers the price significantly for subsequent units according to the text?
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