Three hundred paper mills compete in the paper market. The total cost of production (in dollars) for each mill is given by the formula TC = 1,000Qmill + (Qmill)2, where Qmill indicates the mills annual production in thousands of tons. The marginal external cost of a mill's production (in dollars) is given by the formula MEC = 200 + 2Qmill. Finally, annual market demand (in thousands of tons) is given by the formula Qd = 200,000 - 100P. What is the efficient price?
A. $1,400
B. $1657.14
C. $685.71
D. $1,200
B. $1657.14
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What causes the labor demand curve to shift? List three factors that can cause the labor demand curve to shift rightward?
What will be an ideal response?
If the price exceeds the average variable cost, by producing the level of output such that marginal revenue equals marginal cost, the firm ensures that it will
A) earn an economic profit. B) not suffer any losses. C) earn the largest profit possible. D) survive in the long run.
When calculating the price elasticity of demand, which of the following conditions must be satisfied?
A) All other factors that influence demand must be held constant. B) Prices of related goods must be held constant but all other factors must be allowed to vary. C) Prices of related goods must be allowed to vary but all other factors must be held constant. D) All other factors than influence demand must be allowed to vary.
Which of the following is not a valid criticism of Fogel's (1964) methodology in his study of railroads?
(a) The canal prices used for 1890 were low. (b) The impact of railroads on financial markets is ignored. (c) The nonpecuniary gains from using railroads could have been considered. (d) The amount of land cultivated would have been reduced.