The shape of the firm's marginal revenue curve depends ultimately on whether the firm is
A. a revenue maximizer or a profit maximizer.
B. owned by a man or a woman.
C. a monopolist or a perfect competitor.
D. a market share maximizer or a sales maximizer.
Answer: C
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Consider two countries—A and B. Country A is characterized by a command economy, absence of property rights, high entry barriers for new businesses, and forced child labor
Country B, on the other hand, is characterized by well-defined private property rights, a developed market system, and no entry barriers for new businesses. Which of the two countries is likely to oppose creative destruction more? Why?
Suppose a study finds most pot-smokers drank milk as young children
If we reach the conclusion that because most pot smokers "started" on milk, milk drinking "leads" to pot-smoking (at least among certain susceptible groups of milk users), we are most likely A) engaging in correct analysis. B) confusing statistical correlation with causation. C) following the axioms of selfish interests. D) assuming people really do not know what is in their own interests.
Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for mustard and that bratwurst and mustard are complements. What panel describes what happens in this market when the price of bratwurst falls?
A) Panel (a) B) Panel (b) C) Panel (c) D) Panel (d)
A firm has positive fixed cost and positive variable cost. At its current level of output, marginal cost equals average cost. The firm must
a. not be producing at its profit-maximizing level of output. b. be producing the quantity that minimizes average cost. c. be operating at a point at which total variable cost equals total fixed cost. d. be earning negative profit.