Jerome, the florist, sold 500 bridesmaid's bouquets in June. He estimates his costs that month were ATC = $10, AVC = $6, and MC = $9 . If he sold each bouquet at the constant market price of $9, Jerome:
a. made an economic profit of $500.
b. made a loss of $500.
c. made an economic profit of $1,500.
d. made a loss of $1,500.
e. should have shut down in June.
b
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What will be an ideal response?
If a firm experiences increasing returns to scale at all levels of output: a. the slope of its long-run total cost curve is everywhere negative
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A good that is always used with another good
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Suppose that the domestic production of computer games creates enjoyment for those who play the games. Domestic production of computer games also results in knowledge spillovers that positively impact many other industries. One possible policy that could be employed to encourage increased production of computer games by domestic firms is
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