Refer to the scenario above. If they are the only bidders in the ...

[lracut11]

Refer to the scenario above. If they are the only bidders in the auction and each bidder bids up to his value for the good, the winner will earn a surplus of ________.
 
  A) 500
  B) 625
  C) 125
  D) 150

Question 2

What are the determinants of price elasticity of demand?
 
  What will be an ideal response?

[amanda_14]

Answer to Question 1

C

Answer to Question 2

There are three important determinants of the price elasticity of demand. These are:
a) Closeness of substitutes: As the number of substitutes grows, the price elasticity of demand increases.
b) Budget share spent on the good: As a consumer spends more of his budget on a particular good, the good's price elasticity of demand increases.
c) Available time to adjust: The price elasticity of demand is lower for a good in the short run in comparison to the long run.

[lracut11]

Gracias!

[Jossy]

TYSM