Author Question: Suppose early one Friday morning the economics club buys 200 donuts at 25 cents each, and plans to ... (Read 36 times)

penza

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Suppose early one Friday morning the economics club buys 200 donuts at 25 cents each, and plans to sell all of them later in day on campus for 50 cents each.
 
  Only 60 donuts are sold at 50 cents, however, and by early afternoon the club is seen trying to unload the remaining donuts for 10 cents each. What is the correct price of one of donut? A) 10 cents
  B) 25 cents
  C) 50 cents
  D) Stated this way, the question is meaningless.

Question 2

The decrease in social surplus from a market distortion is referred to as:
 
  A) deadweight loss.
  B) market loss.
  C) revenue loss.
  D) Pareto loss.



apple

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Answer to Question 1

D

Answer to Question 2

A



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