A profit-maximizing monopolist will never operate in the portion of the demand curve with price elasticity equal to
A) -3.
B) -1.
C) -1/3.
D) None of the above—the price elasticity does not matter.
C
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When a government allows raw materials and other intermediate products to enter a country duty free, this generally results in a(an)
A) effective tariff rate less than the nominal tariff rate. B) nominal tariff rate less than the effective tariff rate. C) rise in both nominal and effective tariff rates. D) fall in both nominal and effective tariff rates. E) rise in only the effective tariff rate.
Firm X is producing 1000 units, selling them at $15 each. Variable costs are $3 per unit and the firm is making an accounting profit of $3000 . What is the firm's fixed costs?
a. $9,000 b. $10,000 c. $11,000 d. $12,000
Refer to Scenario 9.10 below to answer the question(s) that follow. SCENARIO 9.10: Investors put up $1,040,000 to construct a building and purchase all equipment for a new cafe. The investors expect to earn a minimum return of 10 percent on their investment. The cafe is open 52 weeks per year and serves 900 meals per week. The fixed costs are spread over the 52 weeks (i.e. prorated weekly). Included in the fixed costs is the 10% return to the investors and $2,000 in other fixed costs. Variable costs include $2,000 in weekly wages, and $600 per week in materials, electricity, etc. The cafe charges $6 on average per meal.Refer to Scenario 9.10. In the long run, the cafe will want to
A. go out of business. B. shut down but not go out of business. C. operate and expand. D. operate but not expand.
If the Federal Reserve uses open-market operations to lower the interest rates on short-term U.S. government bonds, then as a consequence asset prices:
A. Increase, and the average expected rate of return on assets decreases B. Decrease, and the average expected rate of return on assets increases C. Increase, and the average expected rate of return on assets increases D. Decrease, and the average expected rate of return on assets decreases