Refer to the below graph. If the price increases from P1 to P2, then the total revenue will gain area:
A. B + E, but it will lose area H + I + J
B. C + F + H, but it will lose area J
C. E + F + G, but it will lose area J
D. A + B + C, but it will lose area G + I + J
B. C + F + H, but it will lose area J
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Explain the meaning of the term dead capital, and discuss why its existence retards economic growth
What will be an ideal response?
A firm sells 150 units of output at a price of $8 each. The economic cost of producing the 150 units of output is $1,000 . Calculate the firm's level of economic profit
What will be an ideal response?
Assume a firm produces 500 units of a good by using two inputs, capital and labor, whose per unit prices are $10 and $4
Assume also that the marginal physical product of the last unit of capital is 30 and the marginal physical product of the last unit of labor is 10. Is this firm minimizing its costs of producing 500 units of output? A) No, because the marginal products of the two inputs are not equal. B) No, because the MRTS and the price ratio for the two inputs are not equal. C) No, because the prices of the two inputs are not equal. D) The answer cannot be determined without more information.
If the income effect outweighs the price effect of a wage increase, the quantity of labor supplied will:
A. increase. B. decrease. C. remain constant. D. drop to zero.