Which firm in an industry is likely to have higher profits?
a. Sellers with higher costs than their competitors
b. Sellers with lower costs than their competitors
c. Sellers with the same costs as their competitors
d. All of the above
b
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When a positive externality exists, the market is said to fail because it overproduces the good associated with the positive externality.
Answer the following statement true (T) or false (F)
To calculate GDP it is necessary to add up the value of all the
What will be an ideal response?
The problem of political instability has been greatest in which continent?
A. South America B. Europe C. Asia D. Africa
Tax Fighters, Inc., develops, markets, and sells software for tax preparation. Tax Fighters, Inc. sells IRS Tax Fighter, a software for completing federal income tax forms and Gopher Basher, a software for completing Minnesota state income tax forms. For simplicity, assume that all of the costs in this industry are the fixed costs of developing the software packages themselves. The marginal cost of producing another disk is approximately zero.Consider the following information about the demand for tax software. There are an equal number of consumers in each group. Figure 7.1 shows the maximum that each type of consumer is willing to pay for each product. As vice president for pricing, explain your optimal bundling and pricing strategy to maximize Tax Fighter profits from the sale of tax
software. Be sure to clearly explain why your strategy is optimal.
What will be an ideal response?