An economist observed that as more computers are added to a factory, the costs of production initially decline, reach a minimum, and then rise
In a diagram that has costs on the vertical axis and the number of computers on the horizontal axis, the relationship always is
A) negative and then linear after the minimum point.
B) linear and then positive after the minimum point.
C) negative and then positive after the minimum point.
D) positive and then negative after the minimum point.
E) negative both before and after the minimum point.
C
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A perfectly competitive firm will maximize profits (or minimize losses) so long as price (marginal revenue) is:
A) greater than marginal cost. B) greater than average fixed cost. C) greater than average total cost. D) greater than average variable cost.
In the long run, a monopolistic competitor: a. earns a normal rate of return
b. sells a level of output at which marginal revenue is less than price. c. sells a level of output at which marginal revenue equals marginal cost. d. is characterized by all of the above.
In which statement(s) are "demand" and "quantity demanded" used correctly? (I) "An increase in the price of tea will reduce the quantity demanded of tea." (II) "An increase in the price of tea will reduce the demand for sugar used in tea."
a. in both statements I and II b. in statement I only c. in statement II only d. in neither statements I nor II
In a perfectly competitive industry, in the long-run equilibrium
A) the typical firm is producing at the output where its long-run average total cost is not minimized. B) the typical firm is earning an accounting profit greater than its implicit costs. C) the typical firm earns zero profit. D) the typical firm is maximizing its revenue.