Homework Clinic
Social Science Clinic => Economics => Topic started by: 09madisonrousseau09 on Jun 29, 2018
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What are the two different types of relationships that variables can have? Explain each. What do these relationships look like when they are graphed?
What will be an ideal response?
Question 2
Interlace, Inc produces and a unique soda. The company cannot price discriminate. The figure above shows Interlace's demand curve, marginal revenue curve, and marginal cost curve. Interlace, Inc is definitely
A) a perfectly competitive firm.
B) not a perfectly competitive firm.
C) a natural monopoly.
D) None of the above answers is correct.
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Answer to Question 1
Variables can have two relationships: positive (or direct) and negative (or inverse). A positive relationship occurs when the variables move in the same direction, so that when one increases, the other also increases. A negative relationship occurs when the variables move in the opposite direction, so that when one increases, the other decreases. When a positive relationship is graphed, the line slopes upward to the right. When a negative relationship is graphed, the line slopes downward to the right.
Answer to Question 2
B