Marginal cost pricing for an information product
A) would cause the firm to experience economic losses.
B) would allow the firm to break even.
C) would cause the firm to earn economic profits.
D) would cause the firm to expand output to increase economic profits.
Answer: A
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Sandra consumes two goods–tea and coffee. Her demand for tea is inelastic while her demand for coffee is elastic. If there is an increase in the price of both tea and coffee, ________
A) Sandra's expenditure on both tea and coffee is likely to increase B) Sandra's revenue on both tea and coffee is likely to decrease C) Sandra's expenditure on tea will increase and her expenditure on coffee will decrease D) Sandra's expenditure on coffee will increase and her expenditure on tea will decrease
The ________ of a project is the sum of all costs and benefits associated with the project, using present values to make the costs and benefits comparable
A) discounted value B) cumulative present value C) net present value D) gross present value
The figure above shows the market for milk. If one firm owns all the milk outlets in the city and sells 100 gallons of milk
A) the market is efficient because the marginal social benefit from the last gallon of milk exceeds its marginal social cost. B) the market is efficient because the total social benefit from milk exceed the total social cost. C) there is a deadweight loss because the marginal social benefit from the last gallon of milk exceeds its marginal social cost. D) there is a deadweight loss because the marginal social cost of the last gallon of milk exceeds its marginal social benefit.
Which of the following statements about the characteristics of debt and equities is TRUE?
A) They can both be long-term financial instruments. B) Bond holders are residual claimants. C) The income from bonds is typically more variable than that from equities. D) Bonds pay dividends.