Assuming demand is a straight line, the equation of the inverse demand curve is represented as
A. P = a - bQd.
B. Q = a - bPd.
C. P - Qd = a + b.
D. Qd = a + bP.
Answer: A
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The outcome of regulating a natural monopoly using the marginal cost pricing rule is
A) that the firm makes a normal profit. B) that the firm maximizes its profit. C) that consumer surplus is less than what it would be if the firm maximized its profit. D) an efficient level of production. E) that the firm makes an economic profit.
The supply of a good is more price elastic,
a. the fewer alternatives there are to producing the good in question b. the more broadly the market for the good is defined c. the longer the time horizon over which it is measured d. the higher the cost of production e. the more elastic the demand for that good.
Marginal product eventually:
A. declines because some inputs are variable. B. declines because some inputs are fixed. C. increases because some inputs are fixed. D. increases because some inputs are variable.
Which of the following is the best example of the concept of "normal"?
A. Hot dogs and hot dog buns B. SUVs C. Coke and Pepsi D. Ramen noodles