ECO100Y1 Study Guide - Perfect Competition, Profit Maximization, List Of Bus Routes In Queens
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A technological breakthrough lowers the cost of photocopiers. If the demand for photocopiers is inelastic, sales will: Answer:c, quantity (output) rises and total revenue falls diagram #1, march. Note: demand curves: change in quantity demanded vs change in demand, substitutes vs. Complements: normal vs inferior goods ( as income goes down, you use less) Q2) a perfect comp industry is in short run equilib. Industry price and output will increase under which one of the following conditions: Incidence of a sales tax (who ultimately pays tax, the buyer or the seller?) Assume tax to be paid by seller (remember: incidence does not depend on whether paid by seller or by buyer) Q3) a tax has been levied on a product. The more price-elastic the demand for that product is: Insight: use perfectly inelastic and perfectly elastic demand curves to analyze problem. Answer: d, the lower is the revenue that is raised by the tax.
