The following graph shows the marginal and average product curves for labor, the firm's only variable input. The monthly wage for labor is $2,800. Fixed cost is $160,000.
When the firm uses 120 units of labor, what is its AVC at this output?
A. $60
B. $40
C. $70
D. $56
E. none of the above
Answer: B
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Under oligopoly, if one firm in an industry significantly increases advertising expenditures to capture a greater market share, it is most likely that other firms in that industry will
A. pursue a strategy to reduce advertising expenditures to maintain profits. B. decide to increase advertising expenditures even if it means a reduction in profits. C. increase the price of the product to improve profits and then increase advertising expenditures. D. make no changes in advertising expenditures because advertising is effective in the short run, but not the long run.
All else constant, an improvement in technology would cause a firm's marginal, average variable, and average total cost functions to increase (graphically, shift up)
Indicate whether the statement is true or false
If 1 British pound was equal to $2 in 2005 and $1.75 in 2008, it indicates that the pound appreciated against the dollar in 2008
a. True b. False Indicate whether the statement is true or false
Changes caused by the shift from charge-based rates to negotiated rates has had the following results.
a. Most hospitals experience a gap between the amount they receive from their payers and the amount billed. Receipts may be as low as 20 percent of the billed amount. b. Chargemaster rates serve as a powerful guide for optimal resource allocation in the industry. c. A growing percentage of patients with insurance are paying billed rates. d. The change has increased the importance of Ramsey pricing principles in setting rates.