Figure 8.2 presents a firm's marginal cost, average total cost, and average variable cost curves. The firm faces fixed costs of:
A. $20.
B. $110.
C. $130.
D. $4000.
Answer: D
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Over the last decade, a country experiences a significant increase in labor productivity
a. Draw and label a labor market supply and demand diagram. Show how the equilibrium real wage rate and the equilibrium quantity of labor change as productivity increases. b. Draw and label a production function. Show how potential GDP changes as labor productivity increases.
Consumer Willingness to Pay Tom $40 Dick $30 Harriet $25 The table above lists the highest prices three consumers, Tom, Dick and Harriet, are willing to pay for a short-sleeved polo shirt. If the price of one of the shirts is $28 dollars
A) Tom will buy two shirts, Dick will buy one shirt and Harriet will buy no shirts.
B) Tom will receive $12 of consumer surplus from buying one shirt.
C) Tom and Dick receive a total of $70 of consumer surplus from buying one shirt each. Harriet will buy no shirts.
D) Harriet will receive $25 of consumer surplus since she will buy no shirts.
Patents encourage inventions because without a patent
A) other firms could enter the inventor's market by producing the same product. B) nobody would demand the inventor's product. C) the inventor would receive no tax breaks. D) all markets would be public franchises.
Intellectual property rights provided by patent systems typically ________
A) provide tax incentives to encourage research and development B) allow for the depreciation of capital C) compensate the government for building infrastructure D) last about twenty years