When a company produces 5,000 units, total costs equal $150,000 and total variable costs equal $75,000. At this level of output, what is that company average fixed cost?
A. $225,000
B. $30
C. $75,000
D. $15
Answer: D
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When the Fed lowers the federal funds rate, the quantity of money ________ and the supply of loanable funds ________
A) increases; does not change B) decreases; increases C) increases; decreases D) increases; increases E) decreases; decreases
Consider a worker who consumes a composite consumption good (on the vertical axis) and leisure hours (on the horizontal axis).
a. Suppose the worker has 80 hours of leisure per week and can earn a wage of $50 per hour. Illustrate the worker's weekly budget constraint. b. In order to close the deficit, the government introduces a broad-based consumption tax on all consumer goods -- raising the price of the consumption good by 20%. Illustrate the new budget constraint faced by our worker. c. On your graph, indicate the level of tax revenue raised by this broad-based consumption tax. d. Using your graph, discuss why this tax is inefficient. e. In this model is there any difference between the consumption tax and a wage tax? What is different about the real world that would change your conclusion about this? What will be an ideal response?
Under certain conditions, the slope of the marginal revenue product curve reflects the combined effects of diminishing marginal returns and a declining price of the product the firm sells. What are these conditions?
a. The firm must be a price searcher in both the product market and the resource market. b. The firm must be a price searcher in the product market, regardless of whether it is a resource price searcher. c. The firm must be a price searcher in the product market but not necessarily in a perfectly competitive resource market. d. The firm must be a price searcher in a perfectly competitive product market. e. The firm must operate in a decreasing-cost industry.
The fact that a single-price monopolist must lower its price to sell more output explains why price exceeds marginal revenue
a. True b. False