Refer to the graph shown. If the government set the selling price equal to the marginal cost, the firm in the graph would be:
A. making zero economic profits.
B. sustaining losses and eventually would go out of business.
C. making economic profits.
D. making normal profits.
Answer: B
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Which of the following would not help identify market structure?
a. number of firms in the industry b. type of product produced in the industry c. ease of entry into the industry d. forms of competition among firms in the industry e. price of the good
A bottle of wine costs $8 and a quiche costs $5 . At Robert's present levels of consumption, he spends all his income and receives marginal utility of $10 from the last bottle of wine and marginal utility of $4 from the last quiche. To maximize his total utility, Robert should
a. buy less wine and more quiche. b. buy more wine and less quiche. c. spend all of his money on wine. d. change his spending pattern until he buys 8/5ths as much wine as quiche.
If demand elasticity of airline tickets is 3, what percentage change in quantity would the airlines expect from a 10% increase in price?
What will be an ideal response?
In which oligopoly model(s) do firms earn zero profit?
A) Cournot B) Bertrand C) Stackelberg D) Oligopoly firms always earn positive economic profits.