Thomas Edison once said that he began making real profit on light bulbs when he dumped his surplus on the European market at less than the “cost of production.” From this we can deduce Edison
A. did not want to maximize profit.
B. understood the difference between marginal and average cost.
C. had a different definition of the term “profit.”
D. did not understand the difference between fixed and variable cost.
Answer: B
You might also like to view...
The above figure shows the production possibility frontier for a country. Suppose the country is producing at point A. What would be the opportunity cost to increase the production of rice to 12 tons?
A) 6 thousand bottles of wine B) 15 thousand bottles of wine C) 9 thousand bottles of wine D) 6 tons of rice E) Nothing, it is a free lunch.
The cab fare in Horseville is regulated. Recently, the government decided to raise it from $2.00 to $2.50 per ride. After this rise in fare, cab ridership decreased by 10 percent
a) What is the price elasticity of demand for cab rides in Horseville? (Use the midpoint formula to calculate the percentage change in the price.) Is the demand for rides elastic or inelastic? b) According to your estimate, what happened to the cab drivers' revenue after the fare rose? Explain. c) Why might your estimate of elasticity be inaccurate?
The above figure shows the demand and cost curves facing a monopoly. At the profit-maximizing price, the elasticity of demand equals
A) -1. B) zero. C) infinity. D) -3.
A depression can be defined as: a. a mild reduction in total production coupled with a rising unemployment rate that lasts for several years. b. a mild decline in total production that lasts less than six months
c. a severe fall in stock prices that causes financial panic and lasts for several years. d. a severe reduction in total production coupled with high unemployment that lasts for several years. e. a decline in government spending and taxes that lasts for several months.