Consider an industry with two firms producing similar products. Each firm's total cost (in dollars) is given below.Acme Manufacturing: TC = 100 + 3Q. Generic Industries: TC = 500 + 3Q. Which of the following statements is true?
A. Acme has a lower marginal cost than does Generic.
B. Acme has greater economies of scale than does Generic.
C. Acme and Generic have the same marginal cost.
D. Marginal cost at each firm depends on the level of output.
Answer: C
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If a salesperson is paid by the volume of sales he or she makes, then the
A) moral hazard problem is diminished. B) moral hazard problem is enhanced. C) adverse selection problem is enhanced. D) None of the above answers is correct.
Behind the Glass-Steagall Act was the feeling that __________ is too risky for commercial banks
A) underwriting corporate securities B) competing to pay high deposit rates C) making business mortgage loans D) interstate branching
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What will be an ideal response?
The use of a credit card is most similar to:
A. creating legal tender. B. purchasing a certificate of deposit at a commercial bank. C. reducing the value of the U.S. dollar. D. obtaining a short-term loan from a financial institution.