Suppose an industry has total sales of $25 million per year. The two largest firms have sales of $6 million each, the third largest firm has sales of $2 million, and the fourth largest firm has sales of $1 million. The four-firm concentration ratio for
this industry is
A) 36 percent.
B) 60 percent.
C) 50 percent.
D) 25 percent.
Answer: B
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La Super Rica is a taco stand in Santa Barbara, California. It is popular with the locals and even the late Julia Child found the food delicious. Suppose La Super Rica maximizes its profit
If La Super Rica's lunch price is greater than its average total cost, which of the following statements is NOT true? A) La Super Rica is producing at its efficient scale. B) La Super Rica is making an economic profit. C) La Super Rica is producing a quantity where marginal revenue equals marginal cost. D) La Super Rica has excess capacity.
A firm has positive fixed cost and positive variable cost. At its current level of output, marginal cost equals average cost. The firm must
A. not be producing at its profit-maximizing level of output. B. be producing the quantity that minimizes average cost. C. be operating at a point at which total variable cost equals total fixed cost. D. be earning negative profit.
The AD curve is derived by adding up demand curves for all goods and services
a. True b. False
What do wages paid to factory workers, interest paid on a bank loan, forgone interest, and the purchase of component parts have in common?
A. None are either implicit or explicit costs. B. All are opportunity costs. C. All are implicit costs. D. All are explicit costs.