You are the manager of a monopoly that faces a demand curve described by P = 85 ? 5Q. Your costs are C = 20 + 5Q. The revenue-maximizing output is:
A. 10.
B. 9.
C. .85.
D. None of the answers is correct.
Answer: D
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The producer’s surplus is equal to the difference between how much the seller can charge for a product and how much the consumer is willing to purchase it for.
Answer the following statement true (T) or false (F)
“Supply creates its own demand” is an expression of
a. the quantity theory of money. b. monetarism. c. Say’s Law. d. the Keynesian critique of classical economics.
Economic analysis suggests that gains from specialization and exchange
a. will not be realized unless a central planning authority requires that all goods be produced by the low opportunity cost supplier. b. will be realized if individuals are allowed to pursue goals that are in their own self-interest. c. will not be realized unless business firms employ economists when making decisions about the proper combination of resources to utilize in the production process. d. will be realized if individuals place the public interest above the pursuit of their own self-interest.
If the economy adds to its inventory of goods during some year:
A. gross investment will exceed net investment by the amount of the inventory increase. B. this amount should be ignored in calculating that year's GDP. C. this amount should be subtracted in calculating that year's GDP. D. this amount should be included in calculating that year's GDP.