Diminishing returns occurs because:
A. not enough people have jobs.
B. one of the inputs in the production process is fixed.
C. consumers don't buy enough of the products produced.
D. two people have not satisfied their self-interests.
Answer: B
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Though large firms have the knowledge and resources to utilize a better pricing strategy, many choose to use cost-plus pricing. One reason for this is that
A) large firms do not have to maximize their profits because they face little competition from other firms. B) firms often adjust the markup they charge to reflect current demand. C) there is less risk of violating antitrust laws if a cost-plus pricing strategy is used rather than a profit-maximizing pricing strategy. D) the additional revenue that would result from a profit-maximizing pricing strategy is an insignificant fraction of the firms' revenues.
If marginal cost is rising, then average cost must be rising
a. True b. False Indicate whether the statement is true or false
The largest expenditure of the U.S. Federal government is for
A. national defense. B. pensions and income security. C. education. D. interest on public debt.
Suppose that the percentage change in demand is -20%, the price elasticity of demand is 3, and the price elasticity of supply is 2. What is the percentage change in the equilibrium price?
A. -4% B. 4% C. 100% D. -100%