When demand is elastic, the marginal revenue resulting from a decrease in price is:
A) positive.
B) zero.
C) negative.
D) cannot be determined without more information.
A
You might also like to view...
Answer the following statements true (T) or false (F)
1. Under perfect competition, each firm can sell its entire supply at the market price. 2. The output level that yields maximum profit under perfect competition is where MR equals MC. 3. Under conditions of perfect competition, profits exist whenever AR is above AVC at equilibrium output. 4. On a graph of average cost curves, the space between ATC and AVC represents AFC. 5. Under conditions of perfect competition, if MR is below ATC at equilibrium output, the firm is suffering a loss.
A monopolized market is characterized by:
a. a sole supplier, no close substitutes, and free entry. b. a sole supplier, no close substitutes, and barriers to entry. c. a sole supplier, many close substitutes, and barriers to entry. d. a sole supplier, a few close substitutes, and free entry.
Two firms, Kegareta Inc. and Sucio Enterprises, have access to five production processes, each one of which has a different cost and gives off a different amount of pollution. The daily costs of the processes and the corresponding number of tons of smoke emitted are shown in the accompanying table. ABCDE 4 tons/day3 tons/day2 tons/day1 tons/day0 tons/dayKegareta Inc.$40$85$135$190$250Sucio Enterprises$120$175$250$345$460 Suppose the government imposes a tax of $56 per day on each ton of smoke emitted. Assuming the revenue the government collects from the tax is used to offset other taxes, what's the total cost to society of this policy?
A. $120 per day B. $205 per day C. $225 per day D. $180 per day
In the above figure, if the price level is 110
A. total expenditures exceed total planned expenditures. B. total planned production equals total expenditures. C. total planned production exceeds total expenditures. D. total planned production is less than total expenditures.