A perfectly competitive firm has a random demand with a 30 percent chance of being $15 and a 70 percent chance of being $20. What is the firm's expected marginal revenue?
A) $20.00
B) $15.00
C) $19.00
D) $18.50
D) $18.50
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A monopolistically competitive firm is operating at a short-run level of output where price is $21, average total cost is $15, marginal cost is $13, and marginal revenue is $13. In the short run this firm should
A. increase the level of output. B. decrease the level of output. C. make no change in the level of output. D. reduce product price.
The above figure shows the U.S. market for replacement cell phone batteries. Area B + area D is the
A) tariff revenue. B) decrease in consumer surplus due to the tariff. C) deadweight loss from tariff. D) increase in producer surplus due to the tariff. E) gain in total surplus due to the tariff.
Which of the following statements is true?
A) The motivation to try to explain something is at the heart of building a theory. B) If a theory makes people uncomfortable then it should be discarded or ignored. C) In order for a theory to be valid it must be a perfect description of reality. D) Building a theory and evaluating a theory are the same thing.
Inflation caused by an increase in aggregate spending is referred to as:
A. demand-push inflation. B. demand-pull inflation. C. hyperinflation. D. cost-push inflation.