Suppose a firm's costs are F + v ? q2 where F and v are positive real numbers and the firm sells its product at the market determined price p. Profits are calculated using
A) p ? q - F - v ? q2.
B) [p -(F/q + v ? q)] ? q.
C) [(p ? q)/q -(F + v ? q)/q] ? q.
D) Both A and B.
D
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If the demand for a product is elastic, the quantity demanded changes by a smaller percentage than the percentage change in price
Indicate whether the statement is true or false
Refer to Figure 20-1. Based on the graph of the labor market above, if a minimum wage of $8 per hour is imposed, which of the following will result?
A) The quantity of labor demanded by firms will rise. B) The quantity of labor demanded by firms will fall. C) The unemployment rate will fall. D) Both A and C will occur.
At a price of $5, Tyrone buys 10 units of a product; when the price increases to $6, Tyrone buys 8 units. Which of the following is correct about Tyrone's behavior?
a. Tyrone's demand has decreased. b. Tyrone's demand has increased. c. Tyrone's quantity demanded has decreased, and his demand has not changed. d. Tyrone's quantity demanded has increased, and his demand has increased. e. Tyrone's demand has increased, and his quantity demanded has decreased.
Suppose that the firms in the perfectly competitive oat industry are currently receiving a price of $2 per bushel for their product and there are constant returns to scale. The minimum possible average total cost of producing oats in the long run is $1 per bushel. Other things being equal, it follows that:
A. the price of oats will be $1 in the long run. B. the price of oats will be somewhere between $1 and $2 in the long run. C. it is not possible to determine the price of oats in the long run from the information given. D. the price of oats will be $2 in the long run.