Answer:
c. a small number of firms are acting strategically.
Explanation:
The Firms in oligopoly can influence market outcome and thus they act strategically to achieve the expected outcome.
Price elasticity of demand is defined by Change in Quantity demanded / Change in Price.
Tom ordered 10 gallons of gas without asking about the price. This means that no matter the price, Tom orders the same quantity of gas (quantity demanded does not change with price). His demand is perfectly inelastic, or 0.
Jerry orders $10 worth of gas. This means that no matter how much it gives him, Jerry will pay $10. The price elasticity of demand depends on how much the price changes by.
For example, if price doubles from $5/gal to $10/gal, demand falls by 50% (2 gallons to 1 gallon), making his price elasticity -0.5
If the price increase 10% from $10/gal to $10.10/gal, demand falls 1% from 1 gal to .99 gallons, making his price elasticity -0.1
Answer:
D. More Units may be sold - but total revenue will be less than it would be at the higher price
Explanation:
Marginal Revenue (MR) represents the additional revenue that can be obtained if sales of a product are increased by one unit.
MR= is change in Total Revenue/Change in Total Output Quantity
In this situation as envisaged by the Marketing Manager, a price cut will lead to an increase in revenue based on more (marginal) units of the product sold at a lower price. The challenge, however, is that this increase in income will not be enough to offset the decrease in revenue that will result as a result of the price cut.
In other words, the organisation is better off selling fewer products or units at its current price than sell more (marginal units) at a reduced price.
The correct answer is "to obtain a Boater I.D.".
Some states in the United States do not require any boater I.D in order to drive a boat, yet some states in the US requires it citizens to apply for a Boater I.D. and go through a safety course in order for them to be approved and allowed to driver their watercraft, it is commonly due to safety regulations.
