Consumers in a country buy only two goods, pens and CDs. The prices and quantities purchased by urban households are in the table above. The reference base year is 2011. If the current year is 2012, the cost of the CPI market basket in 2012 is
A) $3,400. B) $3,508. C) $3,580. D) $3,500. E) $3,588.
E
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What happens when a firm encounters diminishing returns? What causes diminishing returns?
What will be an ideal response?
Total variable costs will initially increase and then begin to decrease as output increases.
Answer the following statement true (T) or false (F)
Which of the following is true of a firm that can successfully practice price discrimination?
a. Its total revenue is often reduced. b. It appropriates a part of the consumer surplus. c. It has no way of distinguishing between types of customers. d. It has no market power in the industry. e. It must be a perfectly competitive firm.
All business firms should consider their fixed costs in determining the prices they set
a. True b. False Indicate whether the statement is true or false