Refer to the two diagrams for individual firms. In Figure 1 line B represents the firm's:
A. demand and marginal revenue curves.
B. demand curve only.
C. marginal revenue curve only.
D. average revenue curve only.
A. demand and marginal revenue curves.
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Financial markets are regulated by
A) the Securities and Exchange Commission. B) the Stock and Bond Exchange Commission. C) the Security and Protection Commission. D) the Stock and Exchange Commission.
In regulating a natural monopoly, the price strategy that ensures the highest possible output and zero profit is one that sets price
A) equal to average total cost where it intersects the demand curve. B) equal to marginal cost where it intersects the demand curve. C) equal to average variable cost where it intersects the demand curve. D) corresponding to the demand curve where marginal revenue equals zero.
During October and November 2008, gasoline prices were falling dramatically making travel by car less expensive but air travel prices were as high as ever
If travel by car is less expensive, and income remains the same, describe the substitution and income effects that occur for travelling by car. A) If travelling by car is a normal good, the substitution effect would cause an increase and the income effect would cause a decrease in travelling by car. B) If travelling by car is a normal good, both the substitution and income effects would be cause an increase in travelling by car. C) If travelling by car is a normal good, the substitution effect would cause a decrease and the income effect would cause an increase in travelling by car. D) If travelling by car is a normal good, both the substitution and income effects would cause a decrease in travelling by car.
If a firm raises funds by recruiting additional owners to invest in the firm
A) the firm's net worth would decrease. B) the firm's financial capital would decrease. C) the firm's financial capital would increase. D) the firm's stock price would decrease.