In the kinked-demand model, there will be a vertical break in the firm's:
A. demand curve.
B. marginal cost curve.
C. average total cost curve.
D. marginal revenue curve.
Answer: D
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Refer to the long-run cost curve for a firm. If the firm produces output Q 1 at an average total cost of ATC 1 , then the firm is:
A. producing the profit-maximizing output but is failing to minimize production costs.
B. incurring X-inefficiency but is realizing all existing economies of scale.
C. incurring X-inefficiency and is failing to realize all existing economies of scale.
D. producing that output with the most efficient combination of inputs and is realizing all
economies of scale.
Harry works at the video rental store for 20 hours per week. He's asked his boss to allow him to work 40 hours per week, but has been told that business is too slow. Harry is considered
A) a discouraged worker. B) an involuntary part-time worker. C) a marginally attached worker. D) not in the labor force. E) a job seeker.
The above figure represents the cost and demand curves for a natural monopoly that is regulated using a marginal cost pricing rule
a) What is the quantity? b) What price is charged? c) What area represents the consumer surplus when the firm is regulated using a marginal cost pricing rule? d) What distance represents the firm's loss per unit when the firm is regulated using a marginal cost pricing rule?
Refer to Table 4-2. The table above lists the highest prices five consumers are willing to pay for a concert ticket. If the price of one ticket rises from $20 to $38
A) only three tickets will be sold. B) no one will buy a ticket. C) consumer surplus decreases from $62 to $12. D) consumer surplus increases from $88 to $142.