Explain why environmentally minded firms in a competitive industry will find it difficult to take environmental action.
What will be an ideal response?
Firms can survive in competition only if they operate at minimum average cost. A firm choosing a more expensive production process to reduce pollution will not be able to compete with a firm ignoring externalities. The environmentally conscious firm will lose money in the long run.
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Define "money."
What will be an ideal response?
Bookstores often offer annual memberships that allow customers to purchase books at a 10% discount. Explain why this may increase profits of the bookstore
What will be an ideal response?
The term "bottleneck" refers to
a. when increasing amounts of variable inputs must share a fixed input. b. "fixity" of some factor of production c. None of the above d. Both a and b
If marginal utility from consuming an extra unit of a good is positive, then the consumer's total utility must increase as more of the good is consumed
a. True b. False