A perfectly competitive ebook publishing firm currently sells its ebook at the market price of $6. Its average total cost is $5.50. In this case:
a. since average total cost is less than the price, the firm will shut down.
b. the firm has positive economic profits.
c. the firm is losing money but will continue to operate.
d. the firm has zero economic profits.
Ans: b. the firm has positive economic profits.
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Which of the following pairs of goods is most likely to have a positive cross-price elasticity?
A) Printers and ink cartridges B) A privately-owned car and public transportation C) Coffee and sugar D) Motorcycles and typewriters
Half of all your potential customers would pay $16 for your product but the other half would only pay $10 . You cannot tell them apart. Your marginal costs are $4 . If you set the price at $16, the expected profit is:
a. $3 b. $4 c. $5 d. $6
The U.S. is the leader in health care.
A. True B. False C. Uncertain
Refer to the above figure. If box D represents the product market and flow (6) represents consumption expenditures, then box C is:
A. businesses, flow (7) is goods and services, and flow (8) is revenue. B. businesses, flow (7) is revenue, and flow (8) is goods and services. C. households, flow (7) is goods and services, and flow (8) is revenue. D. households, flow (7) is revenue, and flow (8) is goods and services.