14. Avital and Joshua each have their own business selling lemonade in front of

Question

14. Avital and Joshua each have their own business selling lemonade in front of their houses. When they each charge 25 cents per glass, their total revenues are equal. How ever, when they each charge 40 centes per glass, Avital revenues are bigger than Joshua's revenues. This is because

a. Joshua faces a more inelastic demand curve

b. Avital faces a more elastic demand curve

c. Joshua faces a more elastic demand curve

d. Avital faces a less inelastic demand curve

e. there is a market failure

15. Which of the following goods is likely t have the most elastic demand curve?

a. Tobacco products

b. Gasoline.

c. Medical care

d. Honda automobiles

16. Average total cost is equal to

a. AFC + AVC

b. AFC/total output

c. AFC/AVC

d. AVC/AFC

Explanation / Answer

b. Avital faces a more elastic demand curve d. Honda automobiles c. AFC/AVC

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