How does a firm in monopolistic competition decide how much to produce and at what price to offer its product for sale?
What will be an ideal response?
A firm that has already decided the quality of its product and its marketing program produces the output at which its marginal revenue equals its marginal cost (MR = MC) because this output maximizes profit. The price is determined from the demand curve for the firm's product and is the highest price the firm can charge for the profit-maximizing quantity.
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A 10 percent decrease in income decreases the quantity demanded of pizza by 3 percent. The income elasticity of demand for pizza is
A) -0.3. B) 0.3. C) 3.3. D) 10.0.
The value-added approach to measuring GDP involves adding up the value of the
a. sales revenues of firms b. payments for the intermediate goods used by all firms c. the wages of the workers used to produce goods d. sales of all firms, minus all their purchases of intermediate goods e. values of final goods minus the value of all services
Which of the following is not a technique that unions have to control the supply of labor?
a. control apprenticeship programs b. control membership dues c. establish a closed shop d. decrease the MRP curve of labor e. limit the number of workers allowed into the union
A level at which the marginal production goes up with new investment:
a. increasing marginal returns b. total cost c. marginal revenue d. marginal product of labor e. marginal cost