Suppose Arf n' Barf restaurant has a monopoly on restaurant food in a certain small town. Their rent, which is one of several fixed costs they pay whether they sell food or not, has gone up. In the short run, the Arf n' Barf should
a. pay the higher rent and increase menu prices
b. pay the higher rent and leave menu prices unchanged
c. pay the higher rent and lower prices
d. go out of business
e. shut down
B
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Of the two economic growth theories, which is the most optimistic about the chances of real GDP per person growing indefinitely? Which is the most pessimistic? What accounts for the differences?
What will be an ideal response?
The key explanation for the prevalence of waterway pollution is: a. the inclusion in decisions of all production costs associated with the use of waterways
b. that there are private costs but no costs to society associated with the use of waterways that are not costs to society. c. that waterways are not private property and can be used free of charge. d. that waterways are not of great value to society.
A good economic model
a. is as simple as possible, including only necessary details b. is as complex as possible, including many details c. represents reality as concretely as possible d. tries to be as detailed as the reality it is describing e. is very detailed regardless of its purpose
An increase in the interest rate would result in a(n)
a. shift to the left in the demand curve for loanable funds b. shift to right in the supply curve of loanable funds c. decrease in the quantity demanded of loanable funds d. increase in the present value of assets e. decrease in the quantity supplied of loanable funds