The market demand for a monopoly firm is estimated to be:Qd = 100,000 - 500P + 2M + 500PRwhere Qd is quantity demanded, P is price, M is income, and PR is the price of a related good. The manager has forecasted the values of M and PR will be $50,000 and $20, respectively, in 2016. The average variable cost function is estimated to beAVC = 520 - 0.03Q + 0.000001Q2Total fixed cost in 2016 is expected to be $4 million. The firm's profit is
A. $200,000.
B. -$182,000.
C. $800,000.
D. $375,000.
E. $100,000.
Answer: C
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A shortage occurs when the market price is lower than the equilibrium price
Indicate whether the statement is true or false
Excess burden calculations typically assume many other distortions.
A. True B. False C. Uncertain
Suppose a firm uses workers and office space to produce output. The firm is locked into a year-long lease on its office space, but it can easily vary the number of employee-hours it uses each day. The accompanying table describes the relationship between the number of employee-hours the firm uses each day and the firm's daily output. Each unit of output sells for $2, the hourly wage rate is $14, and the rent on the office space is $50 per day.Employee-Hours Per DayOutput Per Day0014048091201516023200 What is the marginal cost of production between 80 and 120 units of output each day?
A. $70 B. $14 C. $1.75 D. $1.40
Who developed the school of thought known as utilitarianism?
a. Jeremy Bentham b. Dean Karlan c. Adam Smith d. Karl Marx