Consider a firm that produces 500,00 . units per year. The firm's fixed costs are $100,000 . marginal costs are $250 and the price per unit is $400 . In the short-run, how low can price go before it is profitable to shut down?
a. $150
b. $250
c. $250.20
d. $400
b
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In the long run, profits will equal zero in a competitive market because of
A) constant returns to scale. B) identical products being produced by all firms. C) the availability of information. D) free entry and exit.
Refer to the above table. What is the absolute price elasticity of demand when a price rises from $9 to $9.50?
A) 0.35 B) 0.55 C) 2.57 D) 2.85
A leftward shift of a supply curve is called a(n)
a. increase in supply. b. decrease in supply. c. decrease in quantity supplied. d. increase in quantity supplied.
A tax of $0.25 is imposed on each bag of potato chips that is sold. The tax decreases producer surplus by $600 per day, generates tax revenue of $1,220 per day, and decreases the equilibrium quantity of potato chips by 120 bags per day. The tax
a. decreases consumer surplus by $645 per day. b. decreases the equilibrium quantity from 6,000 bags per day to 5,880 bags per day. c. decreases total surplus from $3,000 to $1,800 per day. d. creates a deadweight loss of $15 per day.