An entrepreneur would be least likely to develop a product if expected average total cost is:
A. $50 and expected price is $50.
B. $60 and expected price is $65.
C. $50 and expected price is $75.
D. $65 and expected price is $40.
Answer: D
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Fresh Flour makes baking flour and sells its flour in 4 pound sacks or bags. The managers of Fresh Flour are considering whether the firm should make or buy the flour sacks. To make the sacks, Fresh Flour needs a $500,000 piece of equipment. Using this equipment, Fresh Flour can make a flour sack for $0.01 and, for simplicity, ignore taxes and assume that the $0.01 cost includes depreciation and
all other costs. Fresh Flour would finance the $500,000 investment using its own funds and, if it purchased the flour sacks from another firm, it would pay $0.19 a flour sack. The life span of the equipment is 10 years and it has no salvage value at the end of the ten years. The discount rate is 6 percent. How many flour sacks does Fresh Flour need each year in order for the net present value to be positive? A) 259,666 B) 377,416 C) 352,589 D) 412,369
Which of the following U.S. antitrust laws prohibits mergers through the acquisition of a firm's assets if the merger would lessen competition?
a. the Sherman Antitrust Act b. the Clayton Act c. the Robinson-Patman Act d. the Celler-Kefauver Anti-Merger Act e. the Federal Trade Commission Act
Offering goods that are similar to competitors' products but more attractive in some ways is called:
A. product distinction. B. product differentiation. C. price-point pinning. D. deceptive advertising.
In order to get his bachelor's degree, Timothy gave up an offer for a full time job as a bartender. Therefore, Timothy incurred an opportunity cost.
Answer the following statement true (T) or false (F)