A firm may choose to raise price when
A. profits would increase at the higher price.
B. MR > MC.
C. average profit is zero.
D. it relies on marginal analysis.
Answer: A
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What are the main differences between neoclassical economics and behavioral economics?
a. Neoclassical economics is mainly theoretical. b. Behavioral economics does not take as given that decision makers are rational. c. Neoclassical economics assumes that decision makers are fully informed. d. All of the above.
If a demand curve for a good were completely vertical, it would be considered:
a. perfectly elastic. b. perfectly inelastic. c. of unitary elasticity. d. relatively inelastic.
If the interest rate is 10 percent, the net present value of $500 to be received one year from now is
a. $413.22. b. $450. c. $454.55. d. $500.
Refer to the graph shown. A decrease in input prices in the short run is likely to cause a movement from:
A. B to D. B. C to A. C. B to A. D. C to D.