During its run on Broadway, the play The Producers regularly sold out all available tickets at the St. James Theater. The theater could have raised ticket prices from $75 to $125 and still sold all available tickets but chose not to do so. The best
explanation for this decision is
A) theater owners are unaware of the elasticity of demand for Broadway shows.
B) theater owners do not want to raise their prices on weekends, when demand is high, and then have to lower prices during the week, when demand is lower.
C) firms sometimes give up profits in the short run to keep their customers happy and increase their profits in the long run.
D) theater owners are not motivated to maximize their profits.
Answer: C
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Which of the following statements is true of economic growth?
A) Countries with inclusive institutions are likely to grow faster than countries with extractive institutions. B) In comparison to countries with extractive institutions, economic growth in countries with inclusive institutions is more likely to stagnate in the long run. C) Countries with extractive institutions are likely to grow faster than countries with inclusive institutions. D) Countries with extractive institutions are likely to grow at the same rate as countries with inclusive institution.
Average fixed costs:
A. always trend downward as output increases. B. always trend upward as output increases. C. are a constant, regardless of quantity of output. D. are a vertical line.
The primary reason why the oversimplified formula overstates the multiplier is that it ignores price-level changes, which reduce the multiplier
a. True b. False Indicate whether the statement is true or false
Calculate the firm's total profit.
