A firm is currently producing at the point where MC = MR. The situation for the firm at this point is P = $5, Q = 100, ATC = $6, AVC = $4.50. What do you recommend this firm do?
A) Increase production above the current output rate, because MC = MR at this rate of output.
B) Continue to produce the current output rate, because P > AVC.
C) Shut down, because AVC > P.
D) Shut down, because ATC > P.
B
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A) shows that demand is on schedule. B) is a graph showing a relationship between the quantity demanded and the price of a good. C) shows the quantity demanded at one price. D) is a list of the quantities demanded at each different price when all other influences on buying plans remain the same. E) shows how the demand changes when the supply changes.
A. What is the difference between a horizontal merger and a vertical merger?
b. Give an example of each type of merger. c. Could a horizontal merger be welfare improving? What will be an ideal response?
The "natural rate of unemployment" is
a. the highest unemployment rate that can be tolerated b. affected by social programs c. not accepted among economists d. likely to be above 10 percent e. not an economic concept
If the cross-price elasticity of demand between two goods is positive, what is the relationship between the two goods?