In 2009 the electronics retailer Circuit City closed its stores. If we assume this was a short-run decision, the most likely explanation for it is that the price of a typical product sold at Circuit City stores was:
A. greater than the average total cost of producing its typical product.
B. equal to the average total cost of producing its typical product.
C. less than the average total cost of producing its typical product but greater than the average variable cost.
D. less than the average variable cost of producing its typical product.
Answer: D. less than the average variable cost of producing its typical product.
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The possible alternatives for an oligopoly range from the monopoly case with ________ to the perfectly competitive case with ________
A) high output; low output B) low prices; high prices C) low profits; high profits D) low output; high output E) no cooperation among the firms; much cooperation among the firms
If there is a shortage of product X:
A. the price of the product will rise. B. the price of the product will decline. C. the supply curve will shift to the left and the demand curve to the right, eliminating the shortage. D. fewer resources will be allocated to the production of this good in the future.
The Chunnel auto tunnel allows motorists to travel between England and France. As an alternative, there is ferry service across the English Channel. What would happen in the market for ferry service if fees for using the Chunnel were increased?
A) The demand for ferry service would increase. B) The demand for ferry service would decrease. C) There would be an upward movement along the demand curve for transits through the Chunnel. D) There would be a downward movement along the demand curve for transits through the Chunnel.
If faculty choose to stay with an old edition of a book, this is predicted to cause
A. used textbook prices to rise (for the older edition). B. used textbook prices to rise (for the current edition). C. used textbook prices to fall (for the older edition). D. new textbook prices to rise.