In the above figure, if the firm is producing Q1 units at a price P1, the firm should
A. increase output and decrease price.
B. decrease output and increase price.
C. not change output or price.
D. shut down.
Answer: A
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Does fiscal policy affect monetary policy?
A) No, because real output and income can and sometimes do move in the opposite direction from nominal money output and income. B) Yes, because the Fed and the Treasury naturally tend to pursue similar goals. C) Yes, because government deficits or surpluses affect the total demand for credit. D) Yes, because the government usually prints new money to finance deficits and retires that money when it runs a surplus.
The forecast is
A) made for some date beyond the data set used to estimate the regression. B) another word for the OLS predicted value. C) equal to the residual plus the OLS predicted value. D) close to 1.96 times the standard deviation of Y during the sample.
When domestic prices rise,
A. people buy fewer imported goods. B. exports rise. C. exports fall. D. interest sensitive consumption rises.
Which would be evidence of price discrimination at a local bar called Heaters?
A. Charging lower prices to customers wearing Heaters t-shirts. B. Charging lower prices during Happy Hour from 5 to 6 p.m. C. Charging higher prices than under perfect competition. D. Charging higher prices for imported than for domestic beer.