A manufacturing company designs and produces an incredibly efficient solar heating system for large buildings and earns very large profits on it. Which of the following is true?
A. The profits this firm earns aren't deserved, as the firm did not take any risks.
B. This firm must not be in a competitive market if it was able to earn a profit.
C. The profits this firm earns are a return for an innovation.
D. both A and C
Answer: C
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The unregulated, single-price monopoly shown in the figure above will produce where its demand
A) equals its MC curve. B) equals its ATC curve. C) is inelastic. D) is elastic.
Economies of scale are also called increasing returns to scale
a. True b. False Indicate whether the statement is true or false
Taxes affect market participants by increasing the price paid by the buyer and received by the seller
a. True b. False Indicate whether the statement is true or false
Which of the following is the primary source of high earnings in a market economy?
A) a willingness to engage in actions where you gain at the expense of others B) a willingness to work hard even if you are not productive C) a willingness to exploit workers and consumers D) the ability to provide others with things that they value highly