Sporto Auto Company manufacturers each of the aluminum engines used in their cars, and there is no outside market for these engines. Suppose the marginal cost of producing the aluminum engines is constant at all quantities
What happens to the optimal transfer price and the quantity of cars produced if the cost of assembly increases? A) Price and quantity increase
B) Price and quantity remain the same
C) Price and quantity decrease
D) Price remains the same and quantity decreases
D
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In the long run, a profit-maximizing monopolist
a. earns zero economic profit. b. produces the same amount as a perfectly competitive industry. c. receives a higher price for his output than a perfectly competitive firm. d. produces at the output level that minimizes his long-run average total cost.
OPEC failed to maintain a high price of oil in the long run, partly because both the supply of oil and the demand for oil are more elastic in the long run than in the short run
a. True b. False Indicate whether the statement is true or false
The FDIC is an example of:
A. risk premium. B. a Federal Reserve Bank tool. C. the Glass-Steagall Act D. deposit insurance.
When demand is perfectly inelastic, an increase in price will
A) leave total revenue unchanged. B) increase total revenue. C) decrease total revenue. D) either increase total revenue or decrease total revenue, but it is impossible to tell which.