The figure above shows the costs and demand curves for the Bigshow Cable Company. If the regulator of Bigshow Cable Company set its price at $4, the company would
A) receive a producer surplus equal to $18 million.
B) make zero economic profit.
C) incur an economic loss of $7 million.
D) none of the above.
B
You might also like to view...
The M1 measure of money includes
A) small denomination time deposits. B) traveler's checks. C) money market deposit accounts. D) money market mutual fund shares.
If the supply curve and the demand curve both shift to the left, then the new equilibrium:
A. price will be lower, but the direction of the change in quantity is uncertain. B. quantity will be higher, but the direction of the price change is uncertain. C. quantity will be lower, but the direction of the price change is uncertain. D. price will be higher, but the direction of the change in quantity is uncertain.
Which of the following sequences would cause E1 to shift to E2?
a. P1 decreases to P2; D1 decreases to D2; Q1 decreases to Q2
b. P1 decreases to P2; Q1 decreases to Q2; D1 decreases to D2
c. D1 decreases to D2; P1 decreases to P2; Q1 decreases to Q2
d. Q1 decreases to Q2; D1 decreases to D2; P1 decreases to P2
Which of the following would result in a higher absolute value of the price elasticity of demand for a product?
A) A wide variety of substitutes are available for the good. B) The time period under consideration is short. C) The good is a necessity. D) The expenditure on the good is small relative to one's budget.