A firm is currently producing in the elastic portion of its demand curve. What course of action do you recommend for it assuming it wants to raise revenue?
A. Increase price, because if it increases price and demand is elastic, total revenue will increase.
B. Reduce price, because if it reduces price and demand is elastic, total revenue will increase.
C. Continue producing at the current output level, because it maximizes its total revenue by producing in the elastic portion of its demand curve.
D. Continue selling at the same price, but increase the amount it produces.
Answer: B
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A) a U-shaped average variable cost curve. B) a U-shaped marginal cost curve. C) a U-shaped average cost curve. D) all of the above
Which of the following statements indicates the idea of trade-offs?
A) "I chose the road less traveled." B) "The devil made me do it." C) "You've got me under your spell." D) "Always give it the best that you can."
Absolute advantage is the ability of a country to produce a good with ________ than another country
a. a lower opportunity cost b. a higher opportunity cost c. fewer resources d. more resources
An ______________ represents the feasible allocations of goods between multiple agents
Fill in the blank(s) with the appropriate word(s).