Refer to Figure 10-7. Suppose the price of Pilates sessions rise ...

[SGallaher96]

Refer to Figure 10-7. Suppose the price of Pilates sessions rise to 30 while income and the price of Yoga sessions remain unchanged. The income effect of this price change is represented by the movement from
 
  A) A to B. B) B to C. C) D to B D) D to C.

Question 2

Refer to Figure 14-2. Now suppose that the government delays Xenophone's entry and Gigacom moves first, what is the likely outcome in the market?
 
  A) Both offer DSL internet service; Xenophone earns a profit of 8 million and Gigacom earns a profit of 7 million.
  B) Xenophone offers internet service via cable line and earns a profit of 4 million while Gigacom offers DSL internet service and earns a profit of 4.5 million.
  C) Xenophone offers DSL internet service and earns a profit of 5 million while Gigacom offer internet service via cable line and earns a profit of 6.5 million.
  D) Both offer internet service via cable line; Xenophone earns a profit of 6 million and Gigacom earns a profit of 9 million.

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Answer to Question 1

D

Answer to Question 2

D