The following figure shows the demand and cost curves facing a firm with market power in the short run.
The firm earns profits of
A. $120.
B. $180.
C. $300.
D. $150.
E. $75.
Answer: A
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Rational inattention refers to ________
A) the risk a firm runs when they do not pay attention to their customers B) firms making infrequent price decisions because of the time and effort those decision require C) the cost to the firm of losing sales from alienating customers D) all of the above E) none of the above
Refer to Scenario 17.1. An employer who only wants to hire individuals who find learning less costly can do so by choosing y* to be anywhere between
A) 7 and 14. B) 8 and 13 1/3. C) 10 and 16. D) 13 1/3 and 20. E) 14 and 20.
Prior to 2008, a bank might have borrowed reserves from another bank because:
A. banks never borrowed from the Fed. B. it kept its reserves too low and could not meet Fed requirements. C. borrowing reserves from other banks is the only way to gain access to reserves. D. it was in danger of becoming insolvent and collapsing.
Expansionary government policies during a period of increasing globalization:
A. decreases unemployment in the nontradable sector and leaves unemployment in the tradable sector unchanged. B. decreases unemployment in both the nontradable and tradable sectors. C. increases unemployment in both the nontradable and tradable sectors. D. decreases unemployment in the tradable sector but leaves unemployment in the nontradable sector unchanged.