Suppose the Company That Owns the Vending Machines on Your

question 45

Multiple Choice

Suppose the company that owns the vending machines on your campus has doubled the price of a can of soda. If they then still sell almost the same number of sodas per day, this suggests:

• A)students do not have good nutritional information.
• B)soda purchases represent a large fraction of students' budgets.
• C)there are few other places to purchase soda on campus.
• D)the price elasticity of demand for soda is equal to 1.

Analyze the impact of market demand changes on prices and output in the short and long run.

Explain the significance of entry and exit of firms in a perfectly competitive market and its effect on long-run equilibrium.

Identify the conditions for long-run equilibrium in a perfectly competitive market.

Describe the characteristics of a perfectly competitive industry that lead to efficiency.

---

Definitions:

Heat Content

The total amount of heat energy contained in a substance or system.

Natural Gas

A type of fossil fuel primarily composed of methane that serves as a source of energy for activities such as heating, cooking, and producing electricity.

Reserves

Areas designated for the preservation of wildlife, natural resources, or cultural heritage, with restrictions on development and use.

Natural Gas

A fossil fuel consisting primarily of methane, used as an energy source for heating, cooking, and electricity generation.