A flat marginal cost curve prior to capacity being reached suggests that the marginal cost of providing entrance to the 100th person is
A. greater than that of the 1000th person.
B. less than that of the 1000th person.
C. unrelated to the marginal cost of the 1000th person.
D. the same as that of the 1000th person.
Answer: D
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In practice, the hedonic price method
a. is easy to use because attribute data are always readily available b. estimates the prices of the product’s characteristics c. can be implemented with a simple empirical model d. has never been used by empirical economists
Describe the three broad categories of the U.S. budget
What will be an ideal response?
A busy country store is the only producer and distributor of maple sausages in New Hampshire. It calculates that if it sets MR = MC, it will sell 2,000 sausages at a price of $10 and make a total economic profit of $6,000 . Instead, the store decides to charge a price of $8 . We can infer that the store
a. is lowering the price so that it can earn more than $6,000 total profit b. is operating in a contestable market so it is pricing the sausages to keep out competition c. will now sell fewer sausages according to the law of demand d. is now operating at a loss of $1 per sausage e. hopes that its demand is inelastic so that total revenue will increase
The amount of a good that must be given up to produce another good is the concept of:
A. scarcity. B. specialization. C. opportunity cost. D. efficiency.