1. Netflix is the largest online DVD rental service offering flat rate rental-by-mail and online streaming to customers in the United States. Currently, there are approximately 8 million subscribers. Suppose Netflix increases their average flat rate by 10 percent and observe their total revenues increase. Based on this information, the

A. price elasticity of demand for Netflix subscription is inelastic.

B. price elasticity of demand for Netflix subscription is elastic.

C. price elasticity of demand for Netflix subscription is unit elastic.

D. income elasticity of demand for Netflix subscription is elastic

2. At the efficient level of production, .

A. producer surplus must be greater than consumer surplus

B. consumer surplus must be greater than producer surplus

C. there is no deadweight loss

D. the market price is greater than the monopoly price

3. Deadweight loss is the decrease in from trading an inefficient amount of a product.

A. only consumer surplus

B. only producer surplus

C. total surplus

D. profit