Refer to the table at right. If the price is? $6 the maximum profit this firm could earn is:
A. ?$414.
B. ?$420.
C. ?$630.
D. ?$210.
Answer: D. ?$210.
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Managerial economics is best defined as
A) the study of economics by managers. B) the study of the aggregate economic activity. C) the study of how managers make decisions about the use of scarce resources. D) All of the above are good definitions.
Unlike firms in a perfectly competitive market, each firm in a monopolistically competitive market produces a quantity where price is: a. equal to its marginal cost of production. b. less than its marginal revenue
c. more than its marginal cost of production. d. more than its average revenue.
The real risk-free interest rate is equal to:
a. The difference between the nominal interest rate and expected inflation. b. The tradeoff that society must make between consuming now and consuming later. c. The rate at which the International Monetary Fund borrows from the World Bank. d. The rate at which banks lend to their best customers (i.e., lowest credit risk). e. None of the above is correct.
Use the midpoint formula to answer this question. Suppose that as the price of Y falls from $2.00 to $1.90, the quantity of Y demanded increases from 110 to 118. Then the price elasticity of demand is
A. -4.0. B. -1.4. C. -3.9. D. -2.1.