Suppose a firm notices that the price it faces has doubled, but it does not change its level of output. It must be the case that
a. profits have doubled
b. the marginal cost curve is falling
c. total revenue has decreased
d. the original price was less than half of the minimum of the AVC curve
e. this situation would not really occur
D
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A natural oligopoly can form
A) if there are economies of scale. B) only if firms sell a differentiated good. C) only if firms sell a homogeneous good. D) if there is only one firm in the industry.
According to research by Stock and Watson, the recent decline in volatility in many macroeconomic variables was a
A) sudden drop that occurred around 1984. B) gradual decline throughout the 1980s. C) sudden drop that occurred around 1990. D) gradual decline throughout the 1990s.
A monopolist's supply curve cannot be derived directly from its marginal cost curve as in the case of a competitive firm
a. True b. False Indicate whether the statement is true or false
Many argue the poor are getting poorer, at least in a relative sense. Evidence that contradicts this is that
A. household spending of the lowest twenty percent of households relative to the highest twenty percent of households has held constant over the last thirty years. B. the official poverty level of income has increased over the years. C. the pretax distribution of income is more equal than the after-tax distribution of income. D. household income of the lowest twenty percent of households relative to the highest twenty percent of households has fallen over the last thirty years.