Suppose that the marginal cost of providing public television to one more viewer is zero. If a public television station sets the price of public television equal to its marginal cost, then:
A. the station's total revenue will be zero.
B. the station will have an incentive to provide the optimal level of programming.
C. the station's total revenue will be positive when there are only a few viewers, but will decline as more viewers tune in.
D. the television station will earn zero economic profit.
Answer: A
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Pretty Polly produces dresses for little girls. At its current advertising level, Pretty Polly's marginal cost of advertising is $500,000 and their marginal benefit is $750,000. Which of the following is true?
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A. a minor role in determining inflation. B. an uncertain role in determining inflation. C. an important role in determining inflation. D. no role in determining inflation.
With rent controls, which of the following is most likely to occur?
A) decreased search activity B) black market activity C) a building boom D) a housing surplus