Assume Robbie's Robots operates in a perfectly competitive market producing 3,000 robots per day. At this output level, the selling price is $800 per robot and the marginal cost is $625 per robot. To maximize profits, Robbie's Robots should
A. make no adjustments as they are already maximizing their profits.
B. increase their output.
C. decrease their output.
D. stop producing since it is earning a loss.
Answer: B
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a. an increase in the cost of capital b. a decrease in the minimum wage c. an increase in the elasticity of substitution d. All of the above
Only realized capital gains are included in taxable income.
A. True B. False C. Uncertain
The conditions in which vertical relationships can enhance a firm's ability to price discriminate include
a. the manufacturer's product is of value to multiple types of customers b. the costs of arbitraging the price differences across markets is large c. the manufacturer acquires the distributer in the higher priced market d. competition provide little ability for the manufacturer has to price above marginal cost
A cost associated with an economic depression is
a. the loss of goods and services that are not produced. b. the loss of individual income to unemployed workers. c. a possible deterioration of working skills of unemployed workers. d. All of these.