Which of the following is not an advantage cost-plus pricing?
A) It leads to profit maximization.
B) It could lead to price stability if the industry is made up of identical firms all using the same method of pricing.
C) It is an easy method to implement if a firm produces multiple products and has overhead costs that are difficult to allocate to a particular good.
D) It is easy to justify price increases when total costs of production increase.
A
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There are two can companies, American and National, which have entered into a collusive agreement. The payoff matrix of economic profits is above. If both firms cheat on the collusive agreement, what amount of economic profit is made by American?
A) $0 B) $3,000 C) $4,000 D) -$2,000
Given the market for illegal drugs, when the government is successful in reducing the flow of drugs into the United States,
a. supply decreases, demand is unaffected, and price increases. b. demand decreases, supply is unaffected, and price decreases. c. demand and supply both decrease, leaving price essentially unchanged. d. supply decreases, demand increases, and price increases substantially.
Suppose a country imposes new restrictions on how many hours people can work. If these restrictions reduce the total number of hours worked in the economy, but all other factors that determine output are held fixed, then
a. productivity and output both rise. b. productivity rises and output falls. c. productivity falls and output rises. d. productivity and output fall.
What is the present value of a payment of $250 one year from today if the interest rate is 4 percent?
a. $240.38 b. $242.24 c. $244.40 d. None of the above are correct to the nearest cent.