In the short run, a perfectly competitive firm can experience which of the following?
i. an economic profit
ii. an economic loss but it continues to stay open
iii. an economic loss equal to its total fixed cost when it shuts down
A) only i
B) i and ii
C) i and iii
D) ii and iii
E) i, ii, and iii
E
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The costs of investment depend on the ________ and the ________.
A. price of new capital goods; real interest rate B. relative price of the firm's output; real interest rate C. marginal product of capital; relative price of the firm's output D. taxes levied on the revenue generated; relative price of the firm's output
When two goods are complements
A) the demands for both goods will be elastic. B) cross price elasticity of demand will be 0. C) cross price elasticity of demand will be negative. D) cross price elasticity of demand will be positive.
If the market for a good consists of a downward sloping demand curve and a vertical supply curve, sellers will have to pay the whole amount of a newly imposed tax.
Answer the following statement true (T) or false (F)
A price discriminating monopolist will
A. charge a higher price for a good with more market demand. B. charge the same price to all consumers. C. charge more to those consumers who have more substitute goods. D. charge a lower price to those consumers who have more elastic demand.