​Figure 53

question 124

Multiple Choice

​Figure 5.3. The figure shows the wage rate and the quantity of labor supplied in an unskilled labor market.
-If the demand for a product is unit-elastic, a 25 percent increase in its price will result in:

• A)a 25 percent change in total revenue.
• B)no change in quantity demanded.
• C)a 1 percent increase in quantity demanded.
• D)a 25 percent decrease in quantity demanded.
• E)a 100 percent change in quantity demanded.

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Definitions:

Industrial Regulation

Governmental regulation of industries to ensure competition, control prices, prevent monopolies, and protect consumers.

Social Regulation

A form of government intervention in the private sector that aims to protect public welfare, health, safety, and the environment.

Costs Of Production

The total expenses incurred by a company to manufacture a product or provide a service, including materials, labor, and overhead.

Natural Monopolies

Situations in which a single firm can supply a good or service to an entire market at a lower cost than what it would be if there were multiple firms due to economies of scale.