If a firm’s fixed cost (overhead) increases, what happens to its profit-maximizing price and output?
What will be an ideal response?
Nothing. Whatever output was most profitable before the increase in fixed costs must still be most profitable because total profit is reduced by the same amount at each and every output level and marginal cost has not changed.
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Ceteris paribus, how does an expansion in the United States affect U.S. net exports?
What will be an ideal response?
In the above figure, what is the profit-maximizing output and price?
A) 8, $7 B) 10, $8 C) 12, $10 D) 10, $10
When government spending is added to consumption and planned investment, the slope of the aggregate expenditure function increases
a. True b. False Indicate whether the statement is true or false
A good is classified as inferior if
a. consumers buy less when the price rises. b. consumers buy less when income rises. c. consumers buy less when the price falls. d. consumers buy more when income rises.