If firms differentiate their products in different ways and charge different price because of these differentiation factors, then
A) demand must be perfectly elastic. B) the law of one price is not violated.
C) transactions costs are being ignored. D) the firm must not be maximizing profit.
Question 2
Refer to Figure 17-1. Suppose the market price of doilies rises to 3. What happens to the curve given in the diagram?
A) There will be a movement along the curve.
B) Nothing, because labor's productivity has not changed.
C) The curve shifts to the right.
D) We cannot answer the question without knowing if Dale would want to hire more workers.
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