A firm’s profits are calculated as the difference between ______.
a. all the money received for its products and all that was spent to produce them
b. the cost of producing the firm’s last unit and the firm’s average per-unit cost
c. the cost of production in the short run and the cost of production in the long run
d. the maximum market price accepted for the firm’s product and the cost to produce it
a. all the money received for its products and all that was spent to produce them
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Minneapolis business Rogue Chocolatier sells specialty chocolate bars with a high cocoa content. If Rogue's average total cost decreases as the business increases plant size, then Rogue experiences
A) economies of scale. B) diseconomies of scale. C) diminishing marginal returns. D) constant returns to scale.
A perfectly inelastic demand:
A. means people will quickly change the quantity they purchase when price changes. B. means people will not respond to any change in price. C. is demonstrated by a perfectly horizontal demand curve. D. has an absolute value greater than 1.
If AVC=$5 and AFC=15, then ATC=
a. $10 b. $5 c. $15 d. $20
The fixed cost curve:
A. is steep when output levels are low, then flattens as output increases. B. is flatter when output levels are low, then gets steeper as output increases. C. is a constant, flat line. D. is a constant, vertical line.