A busy country store is the only producer and distributor of maple sausages in New Hampshire. It calculates that if it sets MR = MC, it will sell 2,000 sausages at a price of $10 and make a total economic profit of $6,000 . Instead, the store decides to charge a price of $8 . We can infer that the store
a. is lowering the price so that it can earn more than $6,000 total profit
b. is operating in a contestable market so it is pricing the sausages to keep out competition
c. will now sell fewer sausages according to the law of demand
d. is now operating at a loss of $1 per sausage
e. hopes that its demand is inelastic so that total revenue will increase
B
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A company can hire non-union workers, but a condition of their employment is that they must join the union within their first 90 days on the job. This is an example of a
A) right-to-work law. B) closed-shop. C) union shop. D) voluntary craft union.
______ provisions in an insurance policy stipulate that it will pay only a certain percentage of losses claimed by the insured
a. Vigilance b. Co-payment c. Non-price exception d. Deductible
An industry in which 5 firms each have a 10 percent market share and 50 firms each have a 1 percent market share will have a Herfindahl index equal to:
A. 1,100. B. 500. C. 550. D. 1,500.
In a binding situation, the Fed rule calls for
A. a negative output level. B. a positive interest rate. C. a negative price level. D. a negative interest rate.