Clarissa Kessler operates a store that sells toys. Her business suffered tremendously when a giant discount store chain opened a store in the area and is able to sell its products for less than Clarissa's wholesale cost
Is this evidence of illegal price discrimination on the part of the discount store chain?
A) No, even if the price discrimination is based on differences in cost, the law states that it is not illegal.
B) No, because it can be argued that the discount store chain is justified in charging lower prices because it is a large-volume buyer and is able to purchase toys at a lower wholesale price than Clarissa.
C) Yes, it is clearly a violation of the Robinson-Patman Act.
D) Yes, the discount store chain is engaging in predatory pricing.
B
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Natural disasters like severe earthquakes are devastating to the economy as well as to the individuals harmed due to
A) supply shocks. B) demand shocks. C) demand-pull inflation. D) demand-pull deflation.
Draw a production function and illustrate the effects of capital investment and technological improvement on labor productivity.
What will be an ideal response?
With an MPS of .2, the MPC will be:
a. .8 b. .3 c. 1.2 d. 5
Refer to the above table. This firm operates in a perfectly competitive market in which the market price is $10/unit. What is TRUE when the firm produces 103 units?
A. Marginal revenue is less than marginal cost. B. Total costs exceed total revenue by $403. C. Total revenue equals $5,060. D. Its total profit is $524.