Refer to the accompanying graph. If this firm is a price taker, then when the price of each unit of output is $30, how much profit does this firm earn at its profit-maximizing level of output?
A. $800
B. $1,600
C. $1,200
D. $500
Answer: A
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"Because of rent seeking, a monopoly may end up making zero economic profit." Is the previous statement correct or incorrect? Why?
What will be an ideal response?
Equilibrium in a competitive market results in the greatest amount of economic surplus from the production of a good or service
Indicate whether the statement is true or false
A vertical demand curve
A) is impossible. B) reasonably represents demand for essential goods. C) has a price elasticity of negative infinity since people will pay an infinite amount for the good. D) represents a normal good.
Moral hazard is:
A. when people engage in behavior that is considered highly desirable by the person who bears the cost of the behavior. B. when buyers and sellers have different information about the quality of a good or the riskiness of a situation. C. when buyers and sellers with the same information about the quality of a good or the riskiness of a situation agree to a somewhat shady deal. D. the tendency for people to behave in a riskier way or provide less effort when they do not face the full consequences of their actions.