Microsoft faces very little competition from other firms for its Windows software. Why isn't the price of the software $1,000 per copy?
a. because the government would not allow such a high price
b. because stockholders would not allow such a high price
c. because the company would sell so few copies that they would earn higher profits by selling at a lower price
d. All of the above are correct.
c
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If a firm produces a given amount of output using the least amount of inputs, it definitely achieves economic efficiency
Indicate whether the statement is true or false
If an activity generates a positive externality, the government can increase total economic surplus by ________ the activity, and if an activity generates a negative externality, the government can increase total economic surplus by ________ the activity.
A. subsidizing; taxing B. subsidizing; banning C. publicizing; taxing D. taxing; banning
Software companies have high fixed costs and low marginal costs. This means that if a software company sells its product in the global market
A. it will gain a large benefit from its fixed investment and generate higher profits. B. the country in which the software company is located will suffer losses because the price of the software will rise with the additional worldwide demand. C. the company will earn more money in the short run, but lose money in the long run as entry into other markets encourages more competition. D. it will lose money because the additional expense of selling in the global market will add a large amount to fixed costs and add very little to revenues.
Due to lowering its prices to compete with its rivals, increased competition from Airbus, and cuts to military spending, Boeing announced it would ________ the number of persons it employed in 2017 and this would ________ the total number of persons
unemployed in the economy. A) decrease; increase B) decrease; decrease C) increase; decrease D) increase; increase