Whether in a natural monopoly or a simple monopoly, the regulated price of electricity is theoretically supposed to be set where
A. marginal cost equals zero.
B. there is no accounting profit.
C. there is no economic profit.
D. marginal revenue is zero.
Answer: C
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New growth theory assumes that
A) all inputs experience diminishing returns. B) only random technological advances produce growth. C) knowledge does not experience diminishing returns. D) None of the above answers is correct.
Answer the following statements true (T) or false (F)
1) If competitive firms spent money on advertising their product, their profits would decrease. 2) The profit-maximizing quantity and price is determined after the optimal amount of advertising is determined. 3) To maximize profits, managers should purchase the quantity of advertising that maximizes gross profit. 4) If a firm only has one advertising medium, it maximizes its profit by first setting the marginal benefit from its product equal to its marginal cost of production and then determining the optimal amount to advertise. 5) It is possible for firms to not maximize profits even if they have optimally allocated their fixed advertising budget.
Scarcity is a problem faced by all but the wealthiest of citizens
a. True b. False Indicate whether the statement is true or false
If both a buyer and a seller have the same information, they are said to have symmetric information
a. True b. False Indicate whether the statement is true or false