Author Question: After running a promotional campaign, the owners of a local shoe store decided to decrease the ... (Read 90 times)

Cooldude101 · **on:** Jul 1, 2018

After running a promotional campaign, the owners of a local shoe store decided to decrease the prices for the shoes sold in their store. One can imply that
a. The promotional expenditures made the demand for their shoes more elastic
b. The promotional expenditures made the demand for their shoes more inelastic
c. The promotional expenditures has no effect on the shoe demand elasticity
d. The owners got it wrong. To cover the promotional expenses, they should have raised the prices.

Question 2

All of the following are true for both competition and monopolistic competition in the long run, except one of them. Which is it?
a. P = MC
b. P = AC
c. Economic profits become zero in the long-run
d. The barriers to entry and exit are relatively easy
e. None of the above is an exception