The long-run average cost curve is the ______ of all of the firm's _____.
A. lower envelope; isocost lines
B. level curve; short-run average cost curves
C. sum; marginal cost curves
D. lower envelope; short-run average cost curves
D. lower envelope; short-run average cost curves
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Economic profits differ from accounting profits because ________
A) the former is calculated by economists and the latter by accountants B) many firms own their own capital so accounting profits do not factor this cost C) most firms report economic profits once a year and accounting profits every pay period D) all of the above E) none of the above
Three established firms—Cobb, Urban, and Sing—are in business in the United States. Which of the following events suggests that an oligopoly exists in their industry?
a. Two new competitors enter the industry after Urban raises its output. b. Cobb and Urban suffer a sales loss after Sing lowers its prices. c. Cobb make its business plan without paying attention to Urban or Sing. d. Sing suffers a sales loss after Cobb raises its prices.
Figure 7.2 shows a monopolist's demand curve. Suppose that the marginal cost is $6 for all units and the current output level is 4 units. Then what would you recommend to the firm?
A. Lower the price to sell more units. B. Raise the price and sell fewer units. C. Maintain the current price and output level. D. There is not sufficient information.
Explain what will happen to the production possibilities curve over time if society gives up some consumption goods in favor of more capital goods
What will be an ideal response?