In a market characterized by a single seller and many buyers, when is it profitable to increase the value of a product by incurring fixed costs?
To see whether an investment in fixed cost (example a new plant) is worth undertaking, we must balance the additional revenue attributable to this new plant over the future against its cost. To do so requires calculation of the present values of future payment streams.
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The short-run Phillips curve shows the relationship between the inflation rate and the unemployment rate when ________ remain(s) constant
A) fiscal policy B) the natural unemployment rate and the expected inflation rate C) monetary policy D) interest rates E) aggregate demand
The law of diminishing marginal utility may be illustrated by a person
a. buying additional goods after getting a pay raise b. eating more twinkies but enjoying them less c. giving some of income to a needy person d. who spends more hours studying than do his fellow students e. buying goods so long as their marginal utility is greater than zero
In the airline industry, tit-for-tat strategies have frequently led to
a. reciprocal hiring practices b. cost-reducing innovations c. profit-destroying price wars d. pricing policies that encouraged the entry of new firms e. profit-enhancing wage bargains
Using game theory as an analytical tool, if one large nation imposes tariffs, the total cost is small; however, when several trading partners do the same:
a. the costs are even smaller. b. the costs balance out and there is no harm. c. the costs are the same but the potential gains are much smaller . d. then all nations gain.