Suppose a farmer is a price taker for soybean sales with cost functions given by TC = .1q2 + 2q + 30 MC = .2q + 2 The profit maximizing level of output is
a. 0
b. 30
c. 40
d. 50
c
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The cost of producing an additional unit of a good or service that is borne by the producer of that good or service is the
A) marginal external cost. B) marginal private cost. C) marginal social cost. D) None of the above answers is correct.
A firm has market power:
A. when it can profitably charge any price of its choosing. B. when it is characterized as a price taker. C. when it can profitably charge a price that is above its marginal cost. D. only when it is the sole firm producing in a market.
Suppose a firm that sells a variety of athletic shoes is trying to start a pattern of price leadership in its market. Which of the following is not a problem this firm might have to face?
a. Rivals recognize the intent of its actions. b. Other firms may not necessarily follow the leader. c. Other firms may not follow the leader but offer better service instead. d. Differentiation among products allows for more variation in price. e. The price leader must keep costs lower than other firms'.
Recall the Application about cultural factors in England and their relevance to the Industrial Revolution to answer the following question(s). In the Application, what was Galor and Moav's (2002) explanation for why families with fewer children gain a comparative advantage in the evolutionary cycle?
What will be an ideal response?