Which of the following best describes marginal cost?
a. The change in total cost when one additional unit of output is produced.
b. Total cost divided by the quantity of output produced.
c. Total variable cost divided by the quantity of output produced.
d. Total fixed cost divided by the quantity of output produced.
e. Costs that do not vary as output varies, and that must be paid even if output is zero.
a
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Suppose there are four firms in a market and each of them sell differentiated products. Does it make sense for these firms to engage in a price war? Why or why not?
What will be an ideal response?
Movie theaters charge lower prices to children and senior citizens because
a. they feel sorry for them. b. they go to more movies, so they get price breaks. c. their elasticity of demand for movie tickets is higher. d. they have more time to attend movies.
Newspaper reports about good news in the economy are often followed by declines in stock and bond prices because
a. the Fed reacts in anticipation of the news to prevent speculation b. financial markets are often irrational c. financial markets prefer recessions to spending shocks d. stock and bond holders fear the Fed's reaction to possible overheating e. newspapers may be confused about the performance of financial markets
Fifteen years ago, China _________________ with the countries of Europe. Today, China ______________________ most European countries
A) traded a great deal; is not a trading partner with B) traded a great deal; is rarely a trading partner for C) did not trade much; is one of the top five trading partners for D) did not trade much; is rarely a trading partner for