A monopolist can earn an economic profit only when:
A. marginal cost equals marginal revenue, and the same is true for a perfectly competitive firm.
B. marginal cost equals price, while a perfectly competitive firm earns a profit if average total cost is less than price.
C. average total cost is less than price and the same is true for a perfectly competitive firm.
D. average variable cost exceed marginal cost, while a perfectly competitive firm earns a profit if average total cost exceeds marginal cost.
Answer: C
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If John can produce 10 chairs or 20 lamps during a week while Mary can produce 12 chairs or 22 lamps in the same time, who has the absolute advantage in producing each good?
A) Mary in producing both goods B) John in producing both goods C) Mary in producing chairs, John in producing lamps D) John in producing chairs, Mary in producing lamps E) Both Mary and John in both goods
The above table gives the demand schedule for Billy Bob's BBQ ribs. The price elasticity of demand for Billy Bob's ribs over the price range of $3 to $1 is equal to
A) 4.00. B) 2.00. C) 0.50. D) 0.25.
Canada produces MP3 players and lumber, and the marginal costs for the two products are $200 per 1,000 board-feet of lumber and $100 per MP3 player
China also produces these goods, and the marginal costs are $300 per 1,000 board-feet of lumber and $100 per MP3 player. Which country has the comparative advantage in lumber production? A) Canada B) China C) Both countries share the comparative advantage. D) We need more information to answer this question.
One result of a tax, regardless of whether the tax is placed on the buyers or the sellers, is that the
a. equilibrium quantity of the good is unchanged. b. price the buyer effectively pays is lower. c. supply curve for the good shifts upward by the amount of the tax. d. tax reduces the welfare of both buyers and sellers.