Managerial Economics A Problem Solving Approach (Chapter 6) Exam Questions With Correct Answers.
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Course
Managerial Economics
Institution
Managerial Economics
Managerial Economics A Problem Solving
Approach (Chapter 6) Exam Questions With
Correct Answers.
1. Individual demand - answer___________1_____________ describes how many units an
individual will purchase at a given price.
Aggregate demand - answer____________1___________, or market demand, is...
Managerial Economics A Problem Solving
Approach (Chapter 6) Exam Questions With
Correct Answers.
1. Individual demand - answer✔___________1_____________ describes how many units an
individual will purchase at a given price.
Aggregate demand - answer✔____________1___________, or market demand, is the total
number of units that will be purchased by a group of consumers at a given price.
1. extent decision - answer✔Pricing is an __________1__________. Reduce price (increase
quantity) if MR > MC. Increase price (reduce quantity) if MR < MC. The optimal price is where
MR = MC.
1. Price elasticity of demand - answer✔______________1_____________, e = (% change in
quantity demanded) / (% change in price)
1. Estimated price elasticity - answer✔______________________1____________ = [(Qt-
Q2)/(Q1+Q2)]/i(P1-P2)/(P1+P2)] is used to estimate demand from a price and quantity change.
1. elastic
2. inelastic - answer✔If lel > 1, demand is ________1_________; if lel < 1, demand is
___________2_________.
Elastic Demand (lel >1) - answer✔____________1________: Quantity changes more than price.
Inelastic Demand (lel) < 1) - answer✔__________1___________: Quantity changes less than
price.
MR > MC - answer✔_________1__________imples that (P - MC)/P > 1/lel; that is, the more
elastic is demand, the lower the optimal price.
1. more
2. less
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