Related to the Economics in Practice on page 306: Almost 90 percent of advertisements seen in movie theaters are produced and sold by two firms, National CineMedia and Screenvision. Assume that National CineMedia is responsible for 70 percent of the advertising, Screenvision is responsible for 20 percent of the advertising, and the other 10 percent is produced by one other firm. Based on these numbers, the HHI in this industry would be
A. 100.
B. 4,900.
C. 5,400.
D. 8,200.
Answer: C
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The level of output at which all economies of scale have been exhausted is known as
A) constant returns to scale. B) optimal economic size. C) minimum efficient scale. D) the economically efficient output level.
When regulating a natural monopoly, average cost pricing is usually used rather than marginal cost pricing because
A) average cost pricing allows the firm to earn a normal rate of return on investment, while marginal cost pricing leads to economic losses. B) average cost pricing is more economically efficient than marginal cost pricing. C) average cost pricing leads to lower profits than marginal cost pricing. D) average cost pricing leads to a lower market price than marginal cost pricing.
Money is critical in facilitating market exchanges and the specialization that these exchanges permit.
Answer the following statement true (T) or false (F)
Refer to the data provided in Table 9.3 below to answer the following question(s). Table 9.3qTFCTVCTCMCAVCATC0$100 $0$100 ---- -- 1100401404040 140 21006016020 30 80 31009019030 30 63.334100124 224 343156 5100180 280 56 36 56 6100 264 364 84 44 60.677100 372 472 108 53.14 67.43Refer to Table 9.3. The lowest output this firm would produce before shutting down is ________ units.
A. 1 B. 2 C. 3 D. 4