Suppose a price searcher faces the following demand curve: At $100, $90, $80, $70, and $60, the quantity demanded is 1, 2, 3, 4, and 5 units respectively. If the firm's marginal cost is $40 at any level of output, it would maximize net revenues by
A) producing 5 units and charging $60.
B) producing 4 units and charging $70.
C) producing 3 units and charging $80.
D) producing 2 units and charging $90.
B
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Graphically, producer surplus is the:
A) difference between the demand curve and the price a consumer pays. B) difference between the supply curve and the price a consumer pays. C) difference between total cost and total revenue. D) product of price of a good and quantity sold.
The marginal product generated by an additional unit of input times the price of the output is called:
A. the value of the marginal product. B. the marginal revenue product. C. Both of these statements are true. D. Neither of these statements is true.
If real interest rates in Japan fall relative to real interest rates in the United States, the yen will likely __________ in terms of the dollar and the dollar will likely __________ in terms of the yen
A) appreciate; depreciate B) depreciate; appreciate C) remain unaffected; remain unaffected D) remain unaffected; appreciate E) remain unaffected; depreciate
Jonah lives in a small town where there is only one Mexican restaurant. Which of the following is likely to be true about the price elasticity of demand for meals at the Mexican restaurant?
A) Demand is likely to be perfectly inelastic. B) Demand is likely to be perfectly elastic. C) Demand is likely to be relatively elastic. D) Demand is likely to be relatively inelastic.