If Q represents a firm's level of output, W represents the wage paid to labor (L) and R is the cost of capital (K), then which of the following represents the firm's isocost line?
A. C = FC + VC(Q)
B. C = FC(Q) + VC(Q)
C. C = WL + RK
D. C = (W + R)Q
C. C = WL + RK
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Two firms, Acme and FirmCo, have access to five production processes, each of which has a different cost and gives off a different amount of pollution. The daily costs of the processes and the corresponding number of tons of smoke emitted are shown in the table below.Process(smoke/day) A(10 tons/day) B(8 tons/day) C(6 tons/day) D(4 ton/day) E(2 tons/day) Cost to Acme ($/day) $750$800$1,000$1,400$2,000 Cost to FirmCo ($/day) $500$750$1,200$2,200 $4,000Suppose the firms are both currently using process A. If the government requires each firm to reduce pollution by 20%, then the firms will adopt process ________, and a total of ________ tons of smoke will be emitted each day.
A. B; 16 B. A; 18 C. C; 12 D. D; 8
Compared to the profit-maximizing outcome, average cost pricing in natural monopoly leads to
a. a higher price. b. decreased consumer surplus. c. the elimination of economic profit. d. less output.
An Italian company builds and operates a pasta factory in the United States. This is an example of Italian
a. foreign direct investment that increases Italian net capital outflow. b. foreign direct investment that decreases Italian net capital outflow. c. foreign portfolio investment that increases Italian net capital outflow. d. foreign portfolio investment that decreases Italian net capital outflow.
In the long run, a monopolistically competitive firm that trades internationally ____________ than it would in autarky.
a. will produce more output b. will earn more monopoly profits c. will have higher average costs d. will produce more output and earn more monopoly profits