Exploring Economics
7th Edition
ISBN: 9781305465596
Author: Sexton
Publisher: Cengage
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Question
Chapter 26, Problem 4P
To determine
(a)
To explain:
The equation of exchange.
To determine
(b)
To explain:
The change in nominal GDPif V is doubled.
To determine
(c)
To explain:
The change in price level, if V is doubled and Q remains unchanged.
To determine
(d)
To explain:
The change in nominal GDPif M is doubled and V remains unchanged.
To determine
(e)
To explain:
The change in nominal
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Use the following table to work Problems 5 to 9.
Minnie's Mineral Springs, a single-price monopoly,
faces the market demand schedule:
Price
Quantity demanded
(dollars per bottle)
10
8
(bottles per hour)
0
1
6
2
4
3
2
4
0
5
5. a. Calculate Minnie's total revenue schedule.
b. Calculate its marginal revenue schedule.
6. a. Draw a graph of the market demand curve
and Minnie's marginal revenue curve.
b. Why is Minnie's marginal revenue less than
the price?
7. a. At what price is Minnie's total revenue maxi-
mized?
b. Over what range of prices is the demand for
water from Minnie's Mineral Springs elastic?
8. Why will Minnie not produce a quantity at which
the market demand for water is inelastic?
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Chapter 26 Solutions
Exploring Economics
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