Which of the following statements is correct?
A) The markup pricing rule that is derived from the rule for profit maximization can be used as a substitute for determining the profit-maximizing level of output by equating marginal revenue and marginal cost.
B) It is reasonable to assume that a profit-maximizing firm will never operate in the inelastic portion of its demand curve.
C) The ability of a profit-maximizing firm to mark up price above average cost is unaffected by the price elasticity of demand for the firm's output.
D) The markup factor and the price elasticity of demand are positively related, i.e., as the price elasticity of demand increases, the markup factor that the profit-maximizing firm can apply to its marginal cost in setting price increases as well.
B
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Someone can become an inefficient producer of a particular good by becoming an extremely potent producer of some other good
A) if efficiency and inefficiency are not calculated in terms of opportunity costs. B) if efficiency is measured in terms of labor hours required to produce each good. C) if a larger output of one good entails a smaller output of the other. D) if the demand for one of the goods declines.
In general, raising taxes has:
A. increasing returns to revenue. B. diminishing returns to revenue. C. increasing then decreasing returns to revenue. D. constant returns to revenue.
Taxes assessed on firms and employees on wages and salaries earned are called
A) dividend taxes. B) payroll taxes. C) corporate profits taxes. D) earned income taxes.
In Figure 32.1, at the market price-quantity combination, the consumer surplus is 
A. HPfloorBG. B. APfloorB. C. P*AC. D. HP*C.