You are the manager of a monopoly that faces an inverse demand curve described by P = 200 ? 15Q. Your costs are C = 15 + 20Q. The profit-maximizing price is:
A. $110.
B. $20.
C. $290.
D. $135.
Answer: A
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In reference to welfare recipients, the high effective marginal tax rate on earnings
a. encourages self-sufficiency b. encourages more labor market activity c. discourages employment d. increases total family income if the marginal tax rate exceeds 100 percent e. tends to increase welfare benefits as more income is earned up to the "means-test" threshold
The Bureau of Labor Statistics counts underemployed persons as those who are currently working:
A. less than they would like to be. B. in a job for which they are overqualified for. C. less hours than their employer requires full-time workers to work. D. in a field that doesn’t add a lot to overall GDP.
The profit-maximizing firm should lay off workers when: a. MRC < MRP
b. MRC > MRP. c. MRC = MRP. d. the MP of labor begins to diminish.
In a perfectly competitive market, entry and exit are the driving forces behind a process that, in the long run, pushes the price _____
a. to the zero-profit point b. to the shutdown point c. below the average variable cost d. above the zero-profit point