Assume there is a toll bridge that is built by a private firm. It's been determined by cost accountants that the marginal cost that each automobile imposes is close to zero
If the bridge cost $1 million to build and 250,000 automobiles cross it each day what is the price that would be necessary for the firm to charge in order to achieve the key efficiency criteria of perfect competition? How might this be a problem for this private bridge company?
The price would have to be equal to zero. This would equal to the marginal cost that each automobile imposes on the bridge. This would be a problem because the firm would not be able to stay in business.
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Which of the following is not held constant in the short run when determining the aggregate supply curve?
a. Interest rates b. Rent c. Wages d. Profit e. Price level
Airlines generally charge travelers willing to stay over Saturday night lower fares because
a. these travelers have lower incomes, and therefore, the airlines would like to help them. b. it cost less to transport travelers willing to stay over a Saturday night. c. the demand of these travelers is elastic, and therefore, the lower fares generate more revenue. d. the demand of these travelers is inelastic, and therefore, the lower fares generate more revenue for the airlines.
Public goods can be provided publicly
Indicate whether the statement is true or false.
Refer to Figure 8.1, which shows a family of average cost curves. The average variable cost curve is represented by:
A. Curve 1. B. Curve 2. C. Curve 3. D. the vertical sum of curve 2 and curve 3.