A bureaucrat at a public utility commission hearing testifies that the local area telephone monopoly is able to maximize its revenue. For that reason the rate-hike request should be denied
What will be an ideal response?
The goal of any firm is to maximize profits, not to maximize revenue. Even if the monopoly were maximizing its revenue this would be no guarantee that it is maximizing its profits.
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In which of the following cases are disputes more likely to be settled by negotiations than by court cases?
a. When the parties involved are risk averse b. When time is not an important factor c. When court costs are low d. When parties have asymmetric beliefs about facts
Yesterday the exchange rate was €1 = $1.30, and today it is €1 = $1.35. In this case the dollar has appreciated.
Answer the following statement true (T) or false (F)
Figure 18-1
illustrates supply and demand for U.S. dollars and British pounds in the foreign exchange market. If the dollar price of pounds is $1.80, which of the following is true?
a.
There is an excess supply of pounds, and the dollar price of pounds will rise.
b.
There is an excess demand for pounds, and the dollar price of pounds will rise.
c.
There is an excess supply of pounds, and the dollar price of pounds will fall.
d.
There is an excess demand for pounds, and the dollar price of pounds will fall.
The reductions in the cost of a single unit that result from large scale output of that product are called
What will be an ideal response?