Xavier produces and sells tomatoes in a purely competitive market. This implies that Xavier's marginal revenue from an extra unit of tomatoes is always equal to the:
A. Unit price
B. Average cost
C. Variable cost
D. Unit profit
A. Unit price
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An increase in the price a firm receives for its output will lead the firm to:
A. leave output unchanged and earn greater profits. B. reduce output. C. expand output. D. leave output unchanged and earn smaller losses.
The above figure shows the reaction functions for two pizza shops in a small isolated town. Firm B producing 100 pizzas and firm A producing 50 pizzas is NOT a Cournot equilibrium because
A) Cournot duopolists agree to share the market equally. B) firm B is not on its best-response function. C) firm A is not on its best-response function. D) neither firm is on its best-response function.
If a country had a nominal GDP of $753 million, and the GDP deflator was 90, what is the real GDP?
a. $685 million b. $828 million c. $836 million d. $863 million
Say a monopolist knew that at the current price for its product demand is inelastic. If marginal costs for this firm are zero, then in order to maximize profits this monopolist should
A. decrease its price. B. keep output at the same level. C. reduce output. D. increase output.