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Grocery store items are examples of products with price-elastic demand.
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- Zoe's bakery operates in a perfectly competitive industry. The variable costs at Zoe's Bakery increase, so all of the cost curves (with the exception of fix cost) shift leftward. The demand for Zoe's pastries does not change, nor does the firm shut down. To maximize profits after the variable cost increase, Zoe's Bakery will ___ its price and ___ its level of production. a. decrease; increaseb. raise; increasec. do nothing to; decreased. raise; decrease
- For a perfectly competitive firm, the short-run supply curve is the:a. greater than the minimum AVC; shut downb. Greater than the minimum AVC but less than the ATC; make an economic profit.c. Greater than ATC; make an economic profitd.Less than ATC; make an economic profit
- Amtrak charges lower fares to students than to its other passengers. This pricing strategy increases Amtrak's profits. From this information, we can conclude that students must have a ____ for Amtrak's train service than other passengera. less price-elastic demandb. more price-elastic demandc. greater demandd. lower demand