A juice company moves from a small kitchen into a large former soda factory that provides space for future expansion. Which of the following offers the best explanation of why average total costs are high as production gets underway in the new plant?
a. Most of the staff is inexperienced.
b. The building is being underutilized.
c. Ingredients are often seasonal.
d. The firm offers volume discounts.
b. The building is being underutilized.
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An example of price floor is
a. Minimum wages b. Rent controls in New York c. Both a and b d. None of the above
When laws and regulations prohibit firms from selling at "prices less than cost,"
A) consumers benefit. B) they are rarely enforced; therefore, competition is allowed to decline in the retailing industry. C) they help maintain competition by eliminating one important advantage of large firms. D) they must define "cost" arbitrarily since no firm has an incentive to sell below cost. E) they serve as our most effective defense against predatory pricing.
One desirable outcome of a market economy is that it leads to a more equitable distribution of income
Indicate whether the statement is true or false
Once a government program is put into place, the employees of the bureau put in charge of administering the program _____
a. become profit maximizers b. begin working in the public interest c. start rent seeking d. become an interest group