The point on a linear demand curve where revenue is maximized is where
A. the price is the highest.
B. elasticity equals 0.
C. elasticity equals -1.
D. elasticity equals infinity.
Answer: C
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A constant-cost, perfectly competitive market is in long-run equilibrium. At present, there are 1,000 firms each producing 400 units of output. The price of the good is $60
Now suppose there is a sudden increase in demand for the industry's product which causes the price of the good to rise to $64. In the new long-run equilibrium, how will the average total cost of producing the good compare to what it was before the price of the good rose? A) The average total cost will be the same as it was before the price increase. B) The average total cost will be lower than it was before the price increase because of economies of scale. C) The average total cost will be higher than it was before the price increase because of diseconomies of scale arising from the increased demand. D) The average total cost will be higher than it was before the price increase since the increase in demand will drive up input prices.
In an open economy, there is interaction with other economies in terms of both trading of goods and services and borrowing and lending
Indicate whether the statement is true or false
Economic profits are calculated as:
A. total revenue minus implicit costs. B. total revenue minus all opportunity costs, explicit and implicit. C. total revenue minus explicit costs. D. None of these is true.
A firm's opportunity costs of production are equal to its implicit costs only
a. true b. false