Firms have market power in:
A. perfectly competitive markets.
B. monopolistically competitive markets and monopolistic markets.
C. monopolistically competitive markets.
D. monopolistic markets.
Answer: B
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Once a firm incurs diminishing marginal returns, total product will begin to decline as more of the variable input is employed
Indicate whether the statement is true or false
Interest rates and investment are actually observed to move most of time in ________, and this is explained by other factors affecting investment shifting the ________ curve to the right
A) the same direction, IS B) the same direction, LM C) opposite directions, IS D) opposite directions, LM
According to the substitution effect, a decrease in the price of a product leads to an increase in the quantity demanded because buyers:
a. purchase more complementary goods. b. purchase more substitute goods. c. purchase fewer substitute goods. d. have more real income.
Suppose Campus Books, a profit-maximizing firm, is the only supplier of the textbook for a given class. The marginal cost of supplying each book is constant and equal to $10, and Campus Books has no fixed costs. The table shows the reservation prices of the eight students enrolled in the class. CustomerReservation Price($/Book)Q60R54S48T42U36V30W24X18If Campus Books is permitted to charge 2 prices, and the bookstore knows customers with a reservation price above $30 never bother with coupons, whereas those with a reservation price of $30 or less always use them, then what will be the bookstore's total economic profit?
A. $154 B. $150 C. $130 D. $158