Basic Economic Concepts

Consumers lose all trust in dining out, causing widespread closures across the restaurant industry.

Random health inspections completely stop since restaurants now have clear financial disincentives for failures.

Restaurants increase menu prices significantly to cover fines as part of regular business expenses even without failing inspections.

Restaurants improve cleanliness standards proactively out of fear facing penalties affecting profitability.

There is not enough information to determine the effect on total revenue without knowing supply elasticity.

Total revenue will decrease because the percentage increase in quantity demanded is smaller than the percentage decrease in price.

Total revenue will remain unchanged as the effect of lower price balances out with higher quantity sold.

Total revenue will increase because consumers will buy more at lower prices.

They may aim marketing efforts at consumers with rising incomes.

They may not change production levels, expecting demand stability regardless of income changes.

They may increase production rapidly expecting consistently high demand growth.

They may reduce prices significantly during economic downturns.

Firms innovating new technologies to reduce emissions and sell unused permits for profit.

Companies opting to buy additional permits rather than investing in cleaner technology over time.

A gradual reduction in total emissions as firms become more efficient and pollution declines.

The creation of a market for emission permits that encourages cost-effective pollution reduction strategies among companies.

Where marginal benefit (MB) is greater than marginal cost (MC).

Where marginal benefit (MB) is less than marginal cost (MC).

Where total benefit exceeds total cost.

Where marginal benefit (MB) equals marginal cost (MC).

Perfect Competition

Oligopoly

Monopoly

Monopolistic Competition

A monopoly is likelier than a perfectly competitive firm to adopt technology that lowers average costs of production, because it can capture more of the gain through higher profits with lower marginal costs and prices, but this may also increase its market power and potential for additional deadweight loss.

A monopolistic producer has no incentive to reduce deadweight loss through advanced technology, since they can already manipulate the market to their advantage.

Producers in perfect competition are more likely to use efficiency-enhancing technology, since they operate under a constant threat of competition eliminating any profits.

Either type of firm is equally likely to invest in technology that lowers average costs, as both seek to profit maximize.

Investing in stocks without any risk involved.

Taking a job where no effort is required for payment.

Purchasing an item that is free of cost.

Choosing between studying for an exam or going out with friends.

Decreased revenue due to lower donation rates, forcing the station to reevaluate operational expenses.

Expansion of online streaming services to attract a wider audience and secure alternative funds.

Collaboration with nonprofit organizations and community outreach programs to create synergies.

Transition to a commercial model and seek advertisement sponsorship to stabilize finances.

The indirect cost associated with a particular resource.

The potential income forgone by using a resource in a specific way.

The cost of raw materials used in production.

The opportunity cost of using a resource.