Which of following is true of monopoly and not of perfect competition?
a. Profit is maximized where marginal cost equals marginal revenue
b. The industry demand curve is also the firm's demand curve
c. Normal profits are made only if average total cost equals average revenue
d. Profit is maximized in the elastic portion of the demand curve
e. the firm has no control over the market price
B
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The manager of a baseball team wants to hire a new pitcher for $4 million per year. Under what circumstances would it make sense for the team to do so?
What will be an ideal response?
Refer to Figure 4-7. The figure above represents the market for iced tea. Assume that this is a competitive market. If 10,000 units of iced tea are sold
A) the deadweight loss is equal to economic surplus. B) producer surplus equals consumer surplus. C) marginal benefit is less than marginal cost. D) the marginal benefit of each of the 10,000 units of iced tea equals $3.
A modern economy has millions of goods and services whose prices are continually increasing and decreasing based on supply and demand.
Select whether the statement is true or false. A. True B. False
Suppose you were given a gift of a gold mine that generates $1,000 of net income every year, indefinitely. And suppose the equilibrium rate of interest is 5 percent. What is the present value of that gold mine?
a. $20,000 b. $5,000 c. $50,000 d. $500,000 e. $10,000