Why are patents important to those who hold them?
A. Without patents, there would be considerably more price discrimination in the market.
B. Without patents, there will no longer be economies of scale in production.
C. Patents act as a barrier to entry, allowing monopoly profits.
D. Patents actually do not matter because they do not guarantee that a firm will make a profit.
Answer: C
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Refer to the table above. If the price of a chair increases to $20 and the rental price of machines is $200 per day, up to how many machines should the firm rent to maximize profits?
A) 2 B) 3 C) 4 D) 5
Why does the supply curve of Japanese yen slope up?
What will be an ideal response?
A group of three plants that is owned and operated by a single firm and that consists of a farm growing wheat, a flour-milling plant, and a plant that bakes and sells bread would best be an example of a:
A. horizontally integrated firm. B. conglomerate. C. vertically integrated firm. D. multiplant firm.
The law of decreasing returns states that as a firm uses more of a
A) fixed input, with a given quantity of variable inputs, the marginal product of the fixed input eventually decreases. B) variable input, total output will increase indefinitely. C) variable input, with a given quantity of fixed inputs, the marginal product of the variable input eventually decreases. D) variable input, output will begin to fall immediately. E) fixed input and a variable input, the marginal product of the fixed input and the marginal product of the variable input both decrease.