The River Rouge plant was built by the Ford Motor Company in the 1920s to produce the company's Model A car. Which of the following is evidence that the River Rouge plant suffered from diseconomies of scale?
A) Model A cars made at the River Rouge plant failed to earn a profit. Ford reduced the average cost of the Model A by cutting its employees' wages.
B) Model A cars made at the River Rouge plant failed to earn Ford a profit. Ford eventually constructed smaller plants to make the Model A at a lower average cost.
C) Model A cars made at the River Rouge plant failed to earn a profit because the price of steel used to manufacture the Model A rose when workers in the steel industry went on strike.
D) Despite an expensive advertising campaign the Model A did not earn the company a profit.
B
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The marginal social benefit curve for a product can be the same as the good's
A) marginal cost curve. B) supply curve. C) demand curve. D) consumer surplus curve.
In March a factory used new technology to produce its output. Then in August a fire destroys half the factory. The new technology shifted the factory's PPF ________ and the fire shifted it ________
A) inward; outward B) outward; inward C) outward; outward D) inward; inward
If the price elasticity of demand is less than 1, a monopoly's
A) total revenue increases when the firm lowers its price. B) total revenue decreases when the firm lowers its price. C) marginal revenue is undefined. D) marginal revenue is zero.
Refer to the graph below for a monopoly. Assuming this were a perfectly competitive market, then the price and quality would be shown at the point of intersection between the
a. MC and AR curves.
b. MC and MR curves.
c. ATC and AR curves.
d. MC and ATC curves.