Big Waves is a large water park. Suppose the individual demand for entrance into Big Waves is Qd = 50 - (2 × P) and each consumer has the same demand. Big Waves has a constant marginal cost of $5 per consumer. If Big Waves practices two-part pricing and requires a membership fee and then a separate entrance fee, what is the profit-maximizing entrance fee?
A) $200 B) $10 C) $5 D) $50
C) $5
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Suppose you are the manager of a large cardboard box industry. In the industry, there are 10 very large firms and 15 small firms. You are aware that the very large firms have a greater marginal benefit from industrywide advertising compared to the small firms. Which of the following payment plans is least likely to create discord across the participating firms?
A) Have each firm pay the exact same fee. B) Have each firm pay the average marginal benefit of industrywide advertising across all firms. C) Place the very large firms into Group 1 and the small firms into Group 2 and require the firms in each respective group to pay the same amount with the firms in Group 1 paying a fee that is greater than the fee paid by Group 2 firms. D) Place the very large firms into Group 1 and the small firms into Group 2 and require the firms in each respective group to pay the same amount with the firms in Group 1 paying a fee that is smaller than the fee paid by Group 2 firms.
If inflation is underestimated by decision makers in the economy when it is rising, the SRAS curve will tend to be: a. vertical
b. horizontal. c. downward sloping. d. upward sloping.
Which of the following is not an example of microfinance?
A. A loan to a small restaurant owner to buy a refrigerator. B. A loan to a U.S.-owned electronics company to expand overseas. C. A loan to a woman to buy a sewing machine to make clothes to sell. D. A loan to a farmer for a goat that will give milk that the farmer can sell.
The music production industry is an example of a(n) ________ industry.
A. monopolistically competitive B. oligopolistic C. monopolistic D. perfectly competitive