Suppose coal is mined at a zero marginal cost and is priced competitively. If the price of coal is growing faster than the interest rate, then coal miners
a. are making positive economic profits.
b. will increase the amount of coal left unmined.
c. should extract more coal now and less coal in the future.
d. will exit the industry in the long run.
b. will increase the amount of coal left unmined.
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Compare and contrast the effect of perfect competition to the effect of perfect price discrimination on: a) efficiency. b) consumer surplus. c) economic profit in the long run
What will be an ideal response?
Very Technical is a firm that sells computing equipment. It costs Very Technical $50 for each order of computer monitors and the variable cost of placing an order is $2 per monitor. Very Technical pays an annual holding cost of $6 per monitor. If Very Technical sells 1,000 computer monitors a year and they order 25 monitors, what is the total annual cost of the monitors?
A) $7,250 B) $4,075 C) $3,150 D) $5,025
Pharmaceutical development provides a good example of rent-seeking behavior, the pursuit of which results in _______.
a. lower economic activity by diverting resource to less-productive uses b. lower prices throughout the economy c. increased economic activity by promoting efficiency d. a more equitable distribution of income and wealth e. greater income and wealth in the private sector
A monopolist's marginal cost is less than the price it charges.
Answer the following statement true (T) or false (F)