A perfectly competitive firm is selling 300 units of output at $4 each. At this output level, total fixed cost is $100 and total variable cost is $500. The firm
A. is experiencing an economic loss.
B. is earning a profit, but not necessarily the maximum profit.
C. should shut down.
D. is maximizing its profit.
Answer: B
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At a price of $8 per dozen, Chuy sells 40 dozen homemade tamales per week. When he raised his price to $12 per dozen, he still sold 40 dozen per week. Based on this information, the demand for his tamales is
A) unit elastic. B) perfectly elastic. C) perfectly inelastic. D) inelastic.
The above figure shows four different markets with changes in either the supply curve or the demand curve. Which graph best illustrates the market for computer manuals after technological advances in making computers occur?
A) Graph A B) Graph B C) Graph C D) Graph D
As we move downward along a typical isoquant, the slope of the isoquant
A) becomes flatter. B) becomes steeper. C) remains constant. D) becomes linear.
Opportunity cost is defined as the value or benefit of the
A. equilibrium price. B. next best alternative. C. most valuable item. D. least valuable item.