Amy runs a business in a market where all firms are price takers. Bill suggests that she lower her price to attract even more business. Should Amy follow Bill's suggestion, or should she even consider raising her price?
If Amy lowers her price, this will reduce her total revenue. Since she can sell all of her product at the market price, there is no reason to sell at a lower price. Because of the nature of this market structure, she would lose all her business at a higher price, as her customers went to her competitors to purchase identical products. There is a reason for calling Amy a price taker.
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Which of these options best reflects Jim’s opportunity cost of operating his own business?
A. The total amount of money he spends to obtain capital equipment B. The value of Jim’s managerial skills that are used to run the business C. The cost of hiring his laborers D. All of the responses are correct.
Marking to market refers to
A) the determination of the prices of options contracts by the interaction of demand and supply. B) the determination of the prices of futures contracts by the interaction of demand and supply. C) the settlement of gains and losses on futures contracts each day. D) the settlement of gains and losses on forward contracts each day.
If A and B are two sets such that set A is a subset of B, and "Pr" represents the probability, then Pr(A and B) will be:
a. Pr[A]. b. Pr[B]. c. Pr[A-B]. d. Pr[A+B].
The firm's shutdown point occurs at an output of
A. 30.
B. 45.
C. 60.
D. 65.