Regulating an industry to remove all economic profit
A. removes all incentive for efficiency and responsiveness to consumer demand.
B. removes distortions caused by cross subsidies.
C. removes allocative inefficiency.
D. increases incentives to be productively efficient.
Answer: A
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Variable cost divided by quantity produced is
a. average total cost. b. marginal cost. c. profit. d. None of the above is correct.
A natural correction to employer discrimination in market economies is the
a. threat of judicial review. b. profit motive. c. political process. d. union movement.
If the total cost function is TC = 10Q3 - 50Q2 + 1000Q + 500, what is the equation for ATC?
What will be an ideal response?
A firm with market power faces the following estimated demand and average variable cost functions:Qd = 39,000 - 500P + 0.4M - 8,000PRAVC = 30 - 0.005Q + 0.0000005Q2where Qd is quantity demanded, P is price, M is income, and PR is the price of a related good. The firm expects income to be $40,000 and PR to be $2. Total fixed cost is $100,000. What is the firm's profit?
A. $335,000 B. $120,000 C. $220,000 D. $147,000