ECO102H1 Lecture 44: Econ Lecture 44 (Mar 28)

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If the demand for photocopiers is price inelastic, we predict that the photocopiers sales will: fall and total revenue will rise, fall and total revenue will fall, rise and total revenue will fall, rise and total revenue will rise, rise, but changes in total revenue will depend on elasticity of supply, technological breakthrough => ss shifts right to ss1 (ie: lower mc of production, p falls to p1 and q rises to q1, because, answer is c: sales (q) rises and total revenue decreases. Industry price and output will increase under which one of the following conditions: there is a decrease in disposable income and the product is a normal good, there is a decrease in the price of a substitute good, there is an increase in the price of a complementary good, there is a decrease in disposable income and the product is an inferior good, none of the above.

Related Questions

23. A technological breakthrough lowers the cost of photocopiers. If the demand for photocopiers is price elastic, photocopier sales will A) fall and total revenue will rise. B) fall and total revenue will fall. C) rise and total revenue will rise. rise and total revenue will fall. E) rise, but changes in total revenue will depend on elasticity of supply

38) A technological breakthrough lowers the cost of photocopiers. If the demand for photocopiers is price inelastic, we predict that photocopier sales will A) rise and total revenue will decrease. B) fall and total revenue will increase. C) rise and total revenue will increase. D) fall and total revenue will decrease. E) rise, but changes in total revenue will depend on elasticity of supply.

A. A competitive firm

can consider only its location in setting the price.
must base its competitive price on product differentiation.
has the ability to set its own price.
must accept the price determined by the intersection of the market supply and demand curves.
has no supply curve.

B. If a firm is making an economic profit, then

the factors of production are being paid their opportunity costs.
there will be no change in the number of firms if the industry is perfectly competitive.
the factors of production are being paid less than their opportunity costs.
the factors of production are being paid more than their opportunity costs.
the firm will exit the industry

C. Along a downward-sloping monopoly demand curve,

marginal revenue is greater than price.
the elasticity of demand is constant.
marginal revenue decreases when the price decreases.
marginal revenue is equal to zero when the price is equal to zero

D. If, in the short run, a perfectly competitive firm is producing at a point where the total cost is greater than total revenue, then the firm should

shut down because economic profits are negative.
continue to produce as long as P > AVC.
continue to produce because accounting profits are positive.
set a higher price for its output.
set a lower price for its output

E. For a perfectly competitive firm, the demand curve is

the marginal revenue curve.
perfectly inelastic.
always equal to marginal cost.
the same as the market demand curve

F. A firm in a(n) industry will have the most elastic demand curve

monopolistic
oligopolistic
monopolistically competitive
perfectly competitive

G. If the demand curve of a monopolist is in the inelastic range, then

total revenue will fall if the price increases.
total revenue will be unchanged if the price increases.
total revenue will rise if the price increases.
the total supply will increase by an equal amount if demand increases.
the price will be unchanged if total revenue increases

H. Monopolistic competition and oligopoly are examples of

monopoly.
perfect competition.
theories of consumer behavior.
imperfect competition.
the extreme cases on the market structure continuum

I. Under which market structure do firms face the flattest (most elastic) demand curve?

perfect competition
monopolistic competition
oligopoly
monopoly

J. At the point of long-run equilibrium for a perfectly competitive firm,

economic profits are zero.
TR > TC.
TR < TC.
P = AVC.
normal profits are zero.

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ECO102H1 Lecture 44: Econ Lecture 44 (Mar 28)

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