According to the text, what explains why a firm would produce different brands of an essentially identical (or highly close-substitute) good? With different brands, the firm
a. creates higher productivity
b. increases its market share
c. better satisfies demand
d. increases the effectiveness of its advertising
e. lowers the cost structures of each brand so that it becomes more efficient
B
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Veruca sells therapeutic bath salts on the Internet. Her annual revenue is $52,000 per year, the explicit costs of her business are $14,000, and the opportunity costs of her business are $17,000 per year. What is her economic profit?
A) $14,000 B) $21,000 C) $31,000 D) $38,000
After firm A acquired firm B, it lowered the prices for the goods produced by both firms. This can increase profits if the goods are
a. Substitutes b. Complements c. Not related d. None of the above
Assume consumers eat either rice or pasta for dinner every night. If the price of rice increases, then one would expect to see:
A. a decrease in the demand for pasta. B. an increase in the quantity of pasta demanded. C. an increase in the demand for pasta. D. a decrease in the quantity of pasta demanded.
Using the equation of exchange and assuming fixed price controls and a constant velocity of money, a decrease in the discount rate could temporarily result in
A. Higher quantity of real output. B. Higher velocity. C. Higher price level. D. Lower money supply.