Refer to the diagram. This firm's average fixed costs are:
A. not shown.
B. the vertical distance between AVC and MC.
C. the vertical distance between AVC and ATC.
D. equal to the per unit change in MC.
C. the vertical distance between AVC and ATC.
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Describe the chain of events leading to exchange rate determination for the following cases:
(a) An increase in U.S. money supply (d) Increase in growth rate of U.S. money supply (c) Increase in world relative demand for U.S products (d) Increase in relative U.S. output supply
Social Security benefits have played an important role in the improved economic status of the elderly over time.
A. True B. False C. Uncertain
Refer to the above graph. What combination would most likely cause a shift from AD 1 to AD 3?
An increase in taxes and an increase in government spending A decrease in taxes and a decrease in government spending An increase in taxes and a decrease in government spending A decrease in taxes and an increase in government spending
Smyth Industries operated as a monopolist for the past several years, earning annual profits amounting to $50 million, which it could have maintained if Jones Incorporated did not enter the market. The result of this increased competition is lower prices and lower profits; Smyth Industries now earns $10 million annually. The managers of Smyth Industries are trying to devise a plan to drive Jones Incorporated out of the market so Smyth can regain its monopoly position (and profit). One of Smyth's managers suggests pricing its product 50 percent below marginal cost for exactly one year. The estimated impact of such a move is a loss of $1 billion. Ignoring antitrust concerns, answer the following question: If Smyth Industries engages in predatory pricing by slashing its price 50 percent
below marginal cost, the present value of current and future profits is: A. $100 million. B. $0. C. ?$100 million. D. $200 million.