The above figure shows the cost curves for a typical firm in a competitive market. From the graph, estimate the firm's profits when price equals $10 per unit
What will be an ideal response?
When price = 10, p = MC when q = 60. TR = 600. The AC is just above 8.5, say 8.6. This yields TC = 516. The firm's profit is estimated to be around $84.
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The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
The existence of economies of scale is one reason oligopolies exist because
A) a firm is able to increase price leading to increased profits. B) the marginal cost decreases as output increases. C) of strategic dependence. D) as output increases average total cost decreases leading to large-scale firms.
An increase in the expected future price of a good will cause the current demand for the good to:
a. decrease, which is a shift to the left of the demand curve. b. decrease, which is a shift to the right of the demand curve. c. increase, which is a shift to the left of the demand curve. d. increase, which is a shift to the right of the demand curve.
"Trade restrictions such as tariffs and quotas are like a blockade that a nation imposes on its own people." Is this statement true?
What will be an ideal response?