Refer to the table below. Relative to Free Cows, the quantity that maximizes the expected profit for Happy Cows is ________ sensitive to demand changes, which makes an accurate forecast ________ valuable to the managers of Happy Cows.
Happy Cows and Free Cows are two separate perfectly competitive dairy farms. The table above shows the respective firms' marginal cost at various production levels.
A) less; more
B) more; less
C) more; more
D) less; less
C) more; more
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Bruce Copperwood's utility of wealth curve is illustrated in the above figure. Bruce is presently employed at a salary of $100,000. There is a 10 percent probability that Bruce will be totally disabled, in which case he will have no wealth
An insurance company (with no operating expenses) would be willing to offer Bruce a disability insurance policy paying $100,000 in the case of total disability for a minimum premium of A) $1,000. B) $10,000. C) $20,000. D) None of the above answers is correct.
If the annual interest rate is 10%, the net present value of receiving $550 in the next year is:
a. $550 b. $551 c. $549 d. $500
Economists and others use economic theory
a. only to analyze situations in which money changes hands. b. as a partial basis for public policy recommendations. c. to confuse their enemies. d. to replace value judgments about important policy issues.
Maria wishes to buy gasoline and have her car washed. She finds that if she buys 9 gallons of gasoline at $2.50 per gallon, the car wash costs $2, but if she buys 10 gallons of gasoline, the car wash is free. For Maria, the marginal cost of the tenth gallon of gasoline is
a. zero. b. 50 cents. c. $2.00. d. $2.50.