If the firm has no fixed costs and variable costs of $2 per unit, what is the value of the firm's monopoly profits when it sets a price that maximizes its monopoly profits?
a. $7
b. $12
c. $15
d. $16
Ans: d. $16
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If a country bans the importation of a particular good, the market equilibrium is shown by the intersection of the foreign demand curve and the domestic supply curve
Indicate whether the statement is true or false
Over the past year, productivity grew 1.8%, capital grew 2%, and labor grew 1%. If the elasticities of output with respect to capital and labor are 0.2 and 0.8, respectively, how much did output grow?
A) 1% B) 2% C) 3% D) 4%
Which of the following WOULD NOT be considered an automatic stabilizer for the economy?
A. Welfare payments B. Unemployment compensation C. The progressive income tax D. An income tax surcharge
The economy is in long-run equilibrium when there is a correctly anticipated increase in aggregate demand. According to new classical theory, the price level will __________ and Real GDP will __________
A) fall; rise B) rise; fall C) fall; remain unchanged D) rise; remain unchanged E) remain unchanged; remain unchanged