Suppose that the inverse demand for a downstream firm is P = 150 ? Q. Its upstream division produces a critical input with costs of CU(Qd) = 5(Qd)2. The downstream firm's cost is Cd(Q) = 10Q. When there is no external market for the downstream firm's critical input, the net marginal revenue for the downstream firm is:
A. NMRd = 140 ? Q.
B. NMRd = 140 ? 2Q.
C. NMRd = 150 ? Q.
D. NMRd = 150 ? 2Q.
Answer: B
You might also like to view...
The simple circular-flow diagram is a model that includes only some key players in the real economy. Which of the following key players are omitted from the simple circular-flow model?
a. households b. firms c. government d. markets for factors of production
Refer to the accompanying table. Corey's opportunity cost of making of a pizza is delivering: Pizzas Made Per HourPizzas Delivered Per HourCorey126Pat1015
A. 1/2 of a pizza. B. 2 pizzas. C. 3/2 of a pizza. D. 2/3 of a pizza.
In 1962, Michael Harrington argued in The Other America that there was chronic, severe poverty in America.
Answer the following statement true (T) or false (F)
Suppose the interest rate is zero and the public expects the price level to fall by 2%. Which of the following statement is true?
A) The value of money falls by 2%. B) Money becomes an interest earning asset; it earns a nominal interest rate of 2%. C) Money becomes an interest earning asset; it earns a real interest rate of 2%. D) Bonds and money will become perfect substitutes since both are non-interest earning assets.