Refer to Figure 16-5. Suppose the firm represented in the diagram decides to practice perfect price discrimination. What is the profit-maximizing price it will charge?
A) It should charge a range of prices from $40 to $16.
B) It should charge a range of prices from $40 to $12.
C) $2
D) $8
A
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The Department of Justice has challenged the merger of two firms, and the case has ended up in the Supreme Court. The two firms argue that they will not use their monopoly power to raise prices or to cut output. Under what judicial standard would their merger be allowed, and under what judicial standard would their merger be disallowed?
What will be an ideal response?
A situation in which output decreases while prices increase is often referred to as:
A. inflation. B. negative economic growth. C. a recession. D. stagflation.
Suppose a firm has an annual budget of $200,000 in wages and salaries, $75,000 in materials, $30,000 in new equipment, $20,000 in rented property, and $35,000 in interest costs on capital. The owner/manager does not choose to pay himself, but he could receive income of $90,000 by working elsewhere. The firm earns revenues of $360,000 per year. What are the annual economic costs for the firm described above?
A. $120,000. B. $450,000. C. $90,000. D. $360,000.
One In the News article titled "Unemployment Spreading Fast Across U.S. Industries" states that in the next few months the rate of unemployment may rise as high as
A. 6 percent. B. 5 percent. C. 8 percent. D. 7 percent.