The manufacturers of information products typically
A) have low fixed costs.
B) have high marginal costs.
C) have high fixed costs.
D) have zero fixed costs.
Ans: C) have high fixed costs.
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As a firm in monopolistic competition sets the price for its product, the firm faces a tradeoff between
A) supply and demand. B) efficiency and equity. C) internal and external economies of scale. D) price and the quantity it can sell. E) its marginal revenue and its price.
If resale price maintenance leads to a shift in the market demand that exceeds the shift in the market supply, the quantity of the good sold will ________ and the manufacturer's profit will ________.
A) decrease; decrease B) decrease; increase C) increase; increase D) increase; decrease
An increase in the price of the good measured on the horizontal axis will cause the budget line to:
A. shift outward. B. become steeper. C. become flatter. D. shift inward.
Which of the main economic schools of thought would believe that the government should undertake a tax policy stressing work and investment incentives?
A. Rational expectations B. Classical C. Supply-side D. Keynesian