Why are isoquants negatively sloped?
A) Along a single isoquant, the firm can substitute the use of one input for another while holding the total level of output constant.
B) Due to the effects of diseconomies of scale.
C) Because the farther the isoquant is from the origin, the higher the level of output.
D) Because price and quantity demanded are inversely related.
A
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Refer to Scenario 3. The average total cost of 5 units of output is:
A) $8. B) $10. C) $29. D) $39.
Monopolies are inefficient because
A) they price discriminate. B) they want to maximize profits. C) they always make above-normal profits. D) price exceeds marginal cost.
A decrease in demand will cause
a. an increase in supply. b. a decrease in supply. c. an increase in quantity supplied. d. a decrease in quantity supplied. e. an increase in equilibrium price.
A candle manufacturer produces 4,000 units when the market price is $11 per unit and produces 6,000 units when the market price is $13 per unit. Using the midpoint method, for this range of prices, the price elasticity of supply is about
a. 6. b. 2.4. c. 0.4. d. 0.67.