Figure 11-5
In Figure 11-5, Crown Theater, a monopolist movie theater, has chosen the profit-maximizing output. At this output level, what is total cost for the firm?
A. $750
B. $600
C. $450
D. $300
Answer: C
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The law of diminishing marginal returns says that as the firm uses more of ________, with a given quantity of ________, the ________ product of the variable input eventually diminishes
A) a fixed input; variable inputs; marginal B) all inputs; capital; average C) a variable input; fixed inputs; average D) a variable input; fixed inputs; marginal
If firms that practice second degree price discrimination use more block prices,
A) both consumer surplus and welfare will decrease. B) both consumer surplus and welfare will increase. C) consumer surplus will decrease but welfare will increase. D) consumer surplus will increase but welfare will decrease.
What happens to a market in equilibrium when there is an increase in supply?
a) excess supply means that producers will make less of the good b) quantity demanded will exceed quantity supplied, so the price will drop c) quantity supplied will exceed quantity demanded, so the price will drop d) undersupply means that the good will become very expensive
Give a few examples of incentive compensation.
What will be an ideal response?