A firm can sell 22 units at $20, but to sell 23 units, the price is cut to $19. The marginal revenue derived from selling the 23rd unit is
A. $9.
B. $3.
C. 0.
D. -$3.
D. -$3.
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Industry X, which is perfectly competitive, is in long-run equilibrium. Assume a new law is passed that requires employers in industry X to provide health insurance to previously uninsured employees
As a result of this new requirement we would expect to observe: A) a decrease in price and an increase in total output in industry X. B) a decrease in price and total output in industry X. C) an increase in price and a decrease in total output in industry X. D) an increase in price and total output in industry X.
Consumers' surplus is the difference between the price
A) sellers receive for a good and the maximum price they would have paid for the good. B) sellers receive for a good and the minimum price for which they could have sold the good. C) buyers pay for a good and the maximum price they would have paid for the good. D) buyers pay for a good and the minimum price for which they would have sold the good.
Exhibit 4-2 Supply and demand curves
The market shown in Exhibit 4-2 is initially in equilibrium at point E3. Union negotiations for workers producing good X result in a wage increase. Other things being equal, which of the following is the new equilibrium after this wage increase is in effect?
A. E1. B. E2. C. E3. D. E4.
Increasing marginal cost of production explains:
A. the law of demand. B. the income effect. C. why the supply curve is upsloping. D. why the demand curve is downsloping.