In the figure above:
A. point A, where MR = AC, represents the point where the difference between total revenue and total cost is the largest.
B. triangle ABC represents the welfare loss to the society because of the monopoly in the market.
C. if the firm is producing an amount QC (point C), it is maximizing profit because MC = AC at that point.
D. point B, where MR = MC, represents the point where the difference between total revenue and total cost is the largest.
Answer: D
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The price elasticity of demand for electricity is -0.40. By how much must the price of the electricity decrease in order for sales to rise by 12%?
a. 3%. b. 4.8%. c. 12.4%. d. 30%.
The function of money that enables money to be used for future purchases is called:
A) medium of exchange. B) store of value. C) unit of account. D) measure of power.
When the number of substitutes increase, the demand curve for a monopolist will
A) not change. B) become more elastic. C) become more inelastic. D) become steeper.
If the prevailing price of shirts is $10 and at this price demanders demand 100 shirts while suppliers are willing to supply 110 shirts, there is a(n)
a. shortage at the $10 price. b. surplus at the $10 price. c. equilibrium in this market. d. shortage if price were to rise above $10.