The graph above shows cost curves for a perfectly competitive firm. If market price is $2, how much profit will the firm earn?
A. -$600
B. $600
C. $400
D. zero
Answer: A
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An increase in the demand for rubles causes the ruble to appreciate
a. True b. False Indicate whether the statement is true or false
Refer to the given data, symbols, and assumptions. If migration is costless and unimpeded, the wage in both countries will equalize at:
Symbols: Q = number of workers demanded; W = wage rate; and VTP = value of the
cumulative total product (output) of the particular number of workers.
Assumptions: (1) The current wage in Zinnia is $20 and the current wage in Marigold is $12; (2) full employment exists in both countries.
A. $16.
B. $18.
C. $20.
D. $14.
Assume you are holding Treasury securities and have sold futures to hedge against interest-rate risk. If interest rates rise
A) the increase in the value of the securities equals the decrease in the value of the futures contracts. B) the decrease in the value of the securities equals the increase in the value of the futures contracts. C) both the securities and the futures contracts decrease in value. D) both the securities and the futures contracts increase in value.
Assume a price elasticity of demand of 0.50. If the tobacco lobby is successful in reducing a tax on the price of cigarettes by 10 percent, the quantity demanded will:
A. Decrease by 5 percent. B. Decrease by 2 percent. C. Increase by 5 percent. D. Increase by 2 percent.