A Firm Has Capacity Limitations and Charges $30 for Their

question 45

Multiple Choice

A firm has capacity limitations and charges $30 for their service during daily peak times.If the market demand elasticity drops from -3 during peak times to -5 at off peak times, how much should the firm charge to earn the maximum profit during off peak times?

• A)$20.
• B)$21.
• C)$24.
• D)not enough information to determine.

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Definitions:

Retrieval Cue

Stimuli or prompts that aid the recall of information stored in memory.

Chunk

In psychology, a unit of information organized in memory, often used to enhance recall through techniques like chunking.

Rehearsal

The practice of repeatedly going over material in one's mind or through behaviors, to strengthen memory or skill.

Hypnosis

A highly relaxed, suggestible state of mind in which a person is likely to feel that his actions and thoughts are happening to him rather than being produced voluntarily.