In many markets for personal services (such as shoe repair or lawn care) with low start-up costs,
a. production exhibits constant returns to scale
b. economies of scale are exhausted rapidly
c. economies of scale are exhausted slowly
d. economies of scale are never exhausted
e. there are only short-run costs, no long-run costs
B
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Mama Lena's, a frozen food producer, is a monopolistically competitive firm. Mama Lena's is currently selling frozen lasagna at a price of $10. Mama Lena's marginal cost is $5 and marginal revenue is $5. This firm should ________ to maximize profits in the short run.
A. decrease output to where price just equals marginal cost B. increase output to where price just equals marginal cost C. continue to produce the same output level D. Indeterminate from the given information.
Suppose that Carla's Candy Shop finds that at the current level of output, marginal revenue is below marginal cost and average variable cost is below price. If the market price is held constant, Carla's Candy Shop should __________ in order to maximize profits
a. raise output b. reduce its price c. reduce output d. close down e. maintain its current output level
Figure 3-19
Refer to . Buyers who value this good less than price are represented by which line segment?
a.
AC.
b.
CE.
c.
BC.
d.
CD.
Briefly explain what economists mean when they refer to the stock market as a random walk.
What will be an ideal response?