Author Question: One Guy's Pizza advertising expenditures are 1,200 and sales are 30,000. When the advertising ... (Read 71 times)

neverstopbelieb · **on:** Jul 1, 2018

One Guy's Pizza advertising expenditures are 1,200 and sales are 30,000. When the advertising expenditure increases to 1,400, pizza sales increase to 32,000. The arc advertising elasticity of demand is approximately ________.

A) 0
B) 0.1
C) 0.4
D) 2.5
E) 12.5

Question 2

Suppose a competitive industry produces output, Q, using some input, i, where the price of the output is PQ and the input price is Pi. Efficient use of resources requires that

A) MRPi = MPi.
B) MRPi = Mpi/PQ.
C) MRPi = MPi PQ.
D) MRPi = Pi.