In the short run, the marginal cost of the first unit of output is $20, the marginal cost of producing the second unit of output is $16, and the marginal cost of producing the third unit of output is $12. The firm's total variable cost of producing three units of output is:
A. $12.
B. $16.
C. $20.
D. $48.
Answer: D
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Which of the following gives rise to a pecuniary externality?
A) Excessive consumption of alcohol leading to ill health B) Sudden increase in the demand for diamonds leading to an increase in their price C) Deforestation leading to the extinction of many species D) Globalization leading to the displacement of indigenous workers
One reason that explains why the short-run aggregate supply curve is upward sloping is:
A. sticky wages. B. cartels keeping prices artificially high. C. the lag involved with public policy making. D. the changing profit levels experienced by firms.
The key element in preserving a monopoly is
a. government subsidy of critical enterprises. b. keeping potential rivals out of the market. c. guaranteeing availability of substitute products. d. increased advertising expenditure.
The demand curve faced by a monopolistically competitive firm coincides with its marginal revenue curve
a. True b. False Indicate whether the statement is true or false