Without price discrimination, the monopolist sells every unit at the same price. As a consequence,
a. marginal revenue is equal to price.
b. marginal revenue is equal to average revenue.
c. price is greater than marginal revenue.
d. Both a and b are correct.
c
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Refer to the payoff matrix below. If each cell has a probability of occurrence of 0.25, what are Cruise R Us' expected profits?
Cruise R Us and Cruise the World compete in the cruise line industry. Each firm needs to determine if they are going to offer special cruise packages with special rates or not offer the specials. The above payoff matrix shows the firms' net economic profit for each set of strategies.
A) $5 B) $8 C) $3 D) $9
A price elasticity of demand of 2.3 implies
a. Demand is inelastic b. Demand is elastic c. Demand is unitary elastic d. Demand is perfectly elastic
In a decreasing-cost industry, the long-run industry supply curve is
a. horizontal b. vertical c. upward sloping d. downward sloping e. the sum of the individual firm's marginal cost curves
In a perfectly competitive industry, firms are likely to:
A.) Exit when there are economic profits because they know the profits will not last. B.) Reduce the level of production when there are economic profits. C.) Enter when there are economic profits. D.) Enter when price is equal to the minimum average total cost.