Advertising costs
A) make the marginal revenue more elastic.
B) shift the ATC curve upward.
C) shift the marginal cost curve rightward.
D) indirectly shift the marginal cost curve upward.
E) affect the marginal cost but not the total cost.
B
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Hermione and Ron are at a sweet shop in London. Hermione looks at the prices of ice cream and chocolate bars and says to Ron: "I can tell you what your marginal rate of substitution between ice cream and chocolate bars is at your best affordable
point." "No, you can't," says Ron. "You don't know my preferences and how much money I have." "I don't need to know all this because I know the prices," Hermione replies. Is she right? Explain.
Monopolistically competitive firms have an incentive to:
A. engage in tactics for bringing in more customers. B. advertise. C. engage in brand promotion. D. All of these statements are true.
Suppose demand increases and supply decreases. Which of the following will happen?
What will be an ideal response?
In this graph, what has changed from equilibrium level E1 to equilibrium point E3?
a. Output has increased.
b. Output has decreased.
c. Price level has increased.
d. Price level has decreased.