Tombstones are produced in a competitive price-searcher market. One producer, Rolling Stones, sells 20 tombstones a week at a price of $500 each. Its average total cost is $600 . From this information, we can conclude
a. new tombstone firms will want to enter.
b. this producer is losing $2,000 a week.
c. this producer is making an economic profit of $400.
d. this producer is setting MR = MC.
e. this producer should increase production.
B
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In Pioneer Ville, the price elasticity of demand for bus rides is 0.5 . When the price of a bus ticket rises by 5 percent, _______
A. the demand for bus rides increases by 10 percent B. the quantity of bus rides demanded increases by 2.5 percent C. the demand for bus rides decreases by 2.5 percent D. the quantity of bus rides demanded decreases by 2.5 percent
Which of the following is NOT a possible solution to the problem of pollution?
A) subsidizing the costs of production of activities that generate pollution B) converting a resource that is communally owned into a privately owned resource C) regulating the quantity of pollution that can be generated D) imposing a pollution tax on producers
Which statement best defines efficiency?
a. when it becomes possible to benefit at least one party without imposing costs on others b. when it is impossible to improve the situation of one party without imposing a cost on another c. the amount that a seller is paid for a good minus the seller’s actual cost d. the amount that individuals would have been willing to pay, minus the amount that they actually paid
Which of the following is consistent with the general consensus about the shape of the short-run aggregate supply curve?
A. Horizontal at all production levels. B. Horizontal until full employment is reached, and then vertical. C. Vertical. D. Horizontal, then upward-sloping, and ultimately vertical.