Suppose That in October the Price of a Cup of Cafe

question 164

Multiple Choice

Suppose that in October the price of a cup of cafe latte was $2.50 and 400 lattes were consumed. In November the price of a latte was $2.00 and 300 lattes were consumed. What might have caused this change?

• A) The price of tea (a substitute for cafe lattes) fell.
• B) The price of tea (a substitute for cafe lattes) rose.
• C) The price of coffee beans (an input of production of cafe lattes) rose.
• D) The price of coffee beans (an input of production of cafe lattes) fell.

Analyze the effects of regulation on natural monopolies, focusing on public ownership, pricing, and consumer welfare.

Distinguish between single-price monopoly and price discrimination practices.

Understand the conditions under which a monopoly can practice price discrimination and its impact on markets.

Compare the differences in welfare outcomes between monopolistic and perfectly competitive markets.

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Definitions:

Posteroanterior

Pertaining to or involving passage from the back to the front, especially reference to the direction of an X-ray beam.

Lateral

Positioned at or relating to the side.

Angiocardiogram

An imaging test that uses X-rays to take pictures of the blood vessels in the heart.

Thermogram

A visual image recorded by capturing the heat patterns and temperatures of an object or body, often used in medical diagnosis and environmental studies.