The price of a cowboy hat is $100. Willie can produce a hat at a marginal cost of $130, Waylon can produce at a marginal cost of $100, and Merle can produce at a marginal cost of $85. Which of the following statements is correct?
A) The sum of producer surplus is $15.
B) All three of these sellers will gain producer surplus from selling a hat.
C) The sum of producer surplus is $30.
D) Willie's producer surplus is $30.
E) The sum of producer surplus is $45.
A
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One result of the financial meltdown of the late 2000s was that mortgage institutions ________ and ________ were brought under direct control of the government
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A tie-in sale is a business practice where a business
A. requires a customer of a product to purchase another product. B. requires another business to purchase its product. C. gives a customer a discount on future purchases of the same product. D. gives a customer a discount on future purchases of a different product.
Income elasticity of demand measures how ____________________.
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The owner of Tie-Dyed T-shirts, a perfectly competitive firm, has hired you to give him some economic advice. He has told you that the market price for his shirts is $20 and that he is currently producing 200 shirts at an AVC of $15 and an ATC of $25. You tell him he should continue to operate in the short run because
A. he has to pay his fixed costs of $2,000 if he shuts down, which is greater than his loss when he operates. B. he is earning positive economic profits of $4,000. C. his loss from operating is only $2,000, which is less than his loss if he shuts down. D. In fact you do not tell him to operate-he should shut down since he has a loss.