In the figure above, the marginal cost of the second computer is
A) 2 television sets per computer.
B) 3 television sets per computer.
C) 5 television sets per computer.
D) 30 television sets per computer.
B
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If a natural monopoly does not inflate its costs, the output it produces is the smallest when the monopoly is
A) left unregulated. B) regulated according to an average cost pricing rule. C) regulated according to a marginal cost pricing rule. D) regulated to maximize total surplus.
The optimal patent length is equal to 20 years
Indicate whether the statement is true or false
If we assume that velocity is constant, and if the money supply increases by 6 percent, we would expect, ceteris paribus, that the price level would
A) increase by 3 percent. B) increase by 6 percent. C) decrease by 3 percent. D) decrease by 6 percent.
As the output produced by a firm increases, the average fixed cost:
a. continues to decline. b. initially increases, and then declines. c. quickly drops to zero. d. becomes constant. e. declines and finally becomes negative.