You own two different energy drink brands: "Blue Cow" and "600 minute energy.". If you reduce the price on "Blue Cow", sales of "600 minute energy" would
a. Increase
b. Decrease
c. Not change
d. None of the above
b
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Assume both the marginal cost and the average variable cost curves are U-shaped. At the minimum point on the AVC curve, marginal cost must be: a. greater than the average variable cost. b. less than the average variable cost
c. equal to the average variable cost. d. at its minimum.
Explain how economic profits are reduced to zero as new firms enter a monopolistically competitive industry
When prices of products are set below equilibrium,
A. society’s resources are inefficiently allocated. B. firms expand output to increase profits. C. firms earn excessively high profits. D. consumers benefit from surpluses of cheap goods.
Which of the following statements is true?
A) Productive inefficiency implies that it is possible to produce more of one good and no less of another, but only if additional resources are made available. B) Productive efficiency implies that it is possible to produce more of one good and no less of another, even without additional resources. C) Productive inefficiency implies that it is impossible to produce more of one good and no less of another. D) Productive inefficiency implies that it is possible to produce more of one good and no less of another, even without additional resources.