To maximize profit, a natural monopolist produces the level of output at which
A. Marginal revenue equals marginal cost.
B. Price equals average total cost.
C. Price equals marginal cost.
D. Marginal cost equals average total cost.
Answer: A
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What will be an ideal response?
The table above gives data for the nation of Pearl, a small island in the South Pacific. If aggregate demand increases so that the quantity of real GDP demanded is $6 billion more at each price level, the new equilibrium real GDP is ________, and the nation is now experiencing a(n) ________.
A) $22 billion; inflationary gap B) $22 billion; recessionary gap C) $28 billion; inflationary gap D) $28 billion; recessionary gap E) $25 billion; equilibrium
FIRREA increased the core-capital leverage requirement for thrift institutions from 3% to
A) 8%. B) 5%. C) 10%. D) 25%
You run a construction firm with unique capabilities. An architecture firm you have worked for in the past is working on a proposal for a new building that could earn them huge profits. They are considering one of two unique design concepts that either
exploit your capabilities or those of another contractor with a different set of capabilities. They contact you to determine if you could actually get the job done and to get a quote to be included in their bid. The client makes a few changes that will have a small impact on your operations but awards the contract to the architect's plan that includes you. How does the awarding of the contract with changes affect how much your final fee for your services?