The following graph shows the market equilibrium for corn in the United States. If the world price of corn is $6 and there are no trade restrictions, the United States will:?
What will be an ideal response?
The following graph shows the market equilibrium for corn in the United States. If the world price of corn is $6 and there are no trade restrictions, the United States will:?
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If the coefficient of elasticity is 25,
A) demand is 25%. B) demand is about to change for the better. C) demand is very elastic. D) demand is very inelastic. E) the law of demand hardly applies.
When a business fails to cover sunk costs, it usually
A) declares a stock split. B) declares bankruptcy. C) does not immediately stop operating. D) stops operating until sunk costs are recovered.
If a natural monopoly is allowed to set its price above its average total cost, then
A) the company makes an economic profit. B) the company incurs an economic loss. C) competitors will enter the market. D) the company will produce more than the efficient amount of output.
A firm is currently producing in the inelastic portion of its demand curve. What course of action do you recommend for it, assuming it wants to raise revenue?
A. Continue producing at the current output level, because it maximizes its total revenue by producing in the inelastic portion of its demand curve. B. Continue selling at the same price, but increase the amount it produces. C. Reduce price, because if it reduces price and demand is inelastic, total revenue will increase. D. Increase price, because if it increases price and demand is inelastic, total revenue will increase.