A natural monopoly's average cost curve i. intersects the demand curve while the average cost curve slopes downward
ii. reaches its minimum before it intersects the demand curve.
iii. intersects the demand curve below the intersection of the marginal cost curve and the demand curve.
A) i only
B) ii only
C) iii only
D) i and iii
E) i, ii, and iii
A
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A manufacturer produces two types of computer software, Word processing (W) and Spreadsheet (S), which is offered to two different retail outlets (#1 and #2). The following table shows the maximum price each retail outlet is willing to pay for each individual software product. Product W Product S Retail #1 $170 $105 Retail #2 $95 $135 What is the optimal pricing strategy that will maximize
revenue for the manufacturer, given the maximum the retail outlets are willing to pay? a. Bundle both products (W and S) and sell them at $230. b. Price product W at $170 and Product S at $135. c. Price product W at $170 and Product S at $170. d. Price product W at $95 and Product S at $105. e. Bundle both products (W and S) and sell them at $275.
Economic theory indicates that the amount consumed of a natural resource depends on
a. the price of the resource. b. consumer income. c. the price of substitute resources. d. all of the above.
Greg's Tasty Ice Cream is considering building a new ice cream factory that costs $8.3 million. The company accountants believe that, not accounting for interest costs, building the factory will increase profits by $5 million the first year, $4 million the second year and have no value thereafter. Greg's Tasty Ice Cream should build the factory if the interest rate is
a. 3% but not if it is 4%. b. 4% but not if it is 5%. c. 5% but not if it is 6%. d. 6% but not if it is 7%.
Based on this production possibilities curve, what is the highest grade that can be earned in either class?
a. 100%
b. 95%
c. 85%
d. 75%