A price searcher faces the following demand function: At $7, 6, 5, 4, and $3, the quantity demanded is 300, 400, 500, 600, and 700 units respectively. If the firm's marginal cost is $300 at any level of output, it would maximize net revenues by
A) producing 400 units and charging $6.
B) producing 500 units and charging $5.
C) producing 600 units and charging $4.
D) producing 700 units and charging $3.
A
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Assume that in Canada the opportunity cost of producing one television set is two bushels of wheat. Assume that in the United States the opportunity cost of producing one bushel of wheat is two television sets. If these two countries specialize according to comparative advantage and then trade with each other:
A. the United States will export both televisions and wheat. B. Canada will export both televisions and wheat. C. Canada will export wheat and import televisions. D. the United States will export wheat and import televisions.
For an oligopoly, when the quantity effect outweighs the price effect, firms may have the incentive to:
A. leave the industry. B. increase output. C. not change the level of output. D. decrease output.
Imports have the same effect on the current size of GDP as:
A. exports. B. investment. C. consumption. D. saving.
An oligopoly with a dominant price leader will produce an output level that is ________ than the output level that would prevail if the industry were a monopoly and sells it at a price that is ________ than the price that would prevail if the industry were a monopoly.
A. higher; higher B. lower; higher C. higher; lower D. lower; lower