If a competitive firm has a U-shaped marginal cost curve then
A) the profit maximizing output will always generate positive economic profit.
B) the profit maximizing output will always generate positive producer surplus.
C) the profit maximizing output is found where MC = MR and MC is decreasing.
D) the profit maximizing output is found where MC = MR and MC is constant.
E) the profit maximizing output is found where MC = MR and MC is increasing.
E
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Scott used $4,000,00 . from his savings account that paid an annual interest of 5% to purchase a hardware store. After one year, Scott sold the business for $4,100,000 . An Economist calculated his profit to be:
a. $300,000 b. $100,000 c. -$100,000 d. -$200,000
Suppose the production of helicopters is an industry characterized by increasing returns to scale and an Argentine firm, Cicare, is the only player in this market. The firm caters to the global market and earns a profit of $10 million. Flettner, a German firm has been considering entering this market for a while, but it is aware that its entry will cause each firm to lose about $4 million
However, a government subsidy allows Flettner to enter the helicopter market and Cicare incurs a loss of $4 million due to its entry. Eventually, Flettner evolves as the monopoly supplier of helicopters while Cicare is forced to shut down. This conclusion rests on which of the following assumptions? a. The German government is experiencing a budget surplus. b. There is low demand for Cicare automobiles in the world market. c. The German government is able to forecast accurately the subsidy required to induce helicopter production. d. The quality of Flettner's helicopters are inferior compared to that of Cicare's. e. The Argentine government is not a proponent of "fair trade," hence does not retaliate by subsidizing Cicare.
According to the following table, how much higher are prices in 2021 compared to in 2019?
a. 48 percent
b. 75 percent
c. 93 percent
d. 175 percent
In a perfectly competitive market, consumer surplus typically is
A) positive. B) negative. C) zero. D) undefined.