The accompanying graph shows the cost curves for Moe's mushroom gathering business, which is perfectly competitive.
If mushrooms sell for $40 per bushel, and Moe chooses the profit-maximizing quantity, he will:
A. earn positive profit.
B. earn negative profit (a loss).
C. earn zero profit.
D. shut down.
Answer: A
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Looking at the macroeconomic statistics for Friedmanland, you discover that at the beginning of the year, the national money supply was equal to $400 million and by the end of the year it was equal to $420 million
You also found out that the inflation rate in Friedmanland was 7%. In this case, you would expect the LM curve to A) shift up and to the left as the real money supply falls. B) shift up and to the left as the real money supply rises. C) shift down and to the right as the real money supply falls. D) shift down and to the right as the real money supply rises.
If Canada goes from a large budget deficit to a small budget deficit, it will
a. increase private saving and so shift the supply of loanable funds right. b. increase investment and so shift the demand for loanable funds right. c. increase public saving and so shift the supply of loanable funds right. d. reduce national saving and shift the supply left.
The following question relates to an oligopoly market where the industry demand curve is P = 100 - Q. If the Bertrand model is assumed to be the appropriate one for analysis, what will be the price of the product and the quantity sold in this duopoly market?
What will be an ideal response?
Programs designed to provide protection against unpredictable financial distress are known as:
a. social insurance programs. b. poverty programs. c. government transfers. d. negative income tax programs.