Define horizontal differentiation
What will be an ideal response?
Horizontal differentiation is the production of products that differ in ways that make them better for some people and worse for others.
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What is asymmetric information?
What will be an ideal response?
If total variable cost exceeds total revenue at all output levels, a perfectly competitive firm
A) has covered its fixed cost. B) should produce in the short run. C) should shut down in the short run. D) is making short-run profits.
Because the marginal product of a variable resource at first increases and then decreases as the output of the firm is increased:
A. total cost at first increases at a decreasing rate and then increases at an increasing rate. B. total variable cost at first increases at an increasing rate and then increases at a decreasing rate. C. average total cost at first increases and then diminishes. D. average fixed cost will rise beyond the point of diminishing returns.
Suppose that a pure monopolist can sell 20 units of output at $10 per unit and 21 units at $9.75 per unit. The marginal revenue of the 21 st unit of output is:
A. $9.75. B. $204.75. C. $4.75. D. $.25.