Refer to the table at right. If the price of the product is $1.50, and the marginal factor cost of an additional unit of an input is $135, how many units of labor should be hired?
A. 14
B. 11
C. 12
D. 13
Ans: C. 12
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The above table shows the short-run total product schedule for the campus book store. With which employee do diminishing marginal returns set in?
A) the 9th employee B) the 6th employee C) the 5th employee D) the 2nd employee
An article in the Wall Street Journal noted the following: Instead of relying on a full-coach, round-trip unrestricted fare of about $2,000 between Cleveland and Los Angeles
Continental [Airlines] since June has offered a $716 unrestricted fare in that market .... Through October, the test resulted in about the same revenue that Continental thinks it would have collected with its higher fare. Source: Scott McCartney, "Airlines Try Cutting Business Fares, Find They Don't Lose Revenue," Wall Street Journal, November 22, 2002. What is the absolute value of the price elasticity of demand on this airline route? A) less than 1 B) approximately 1 C) greater than 1 D) 0
Refer to Figure 14-8 Use the decision tree to determine whether Microsoft should deter Toshiba from entering the market for electronic book readers (e-readers). Assume that each firm must earn a 20% return on investment to break even
Explain Microsoft's decision process.
If a monopoly is maximizing profits:
a. price will always be greater than average cost. b. price will always equal marginal cost. c. price will always be greater than marginal cost. d. price will always equal marginal revenue.