Recall the Application about choosing a price for drones based on a linear demand curve to answer the following question(s).Recall the Application. Suppose a firm that produces drones has a linear demand curve for its product, with a vertical intercept of $1,500. If the firm initially charged a price of $500 and then raised its price to $750, the firm's profit will:
A. increase.
B. decrease.
C. stay the same.
D. decrease until it becomes zero.
Answer: A
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Compare and contrast the four market models in terms of the profit-maximizing output level for each, the shut-down rule for each, the probability of long-run economic profits being earned, and their social desirability
A market consequence of a price floor program is that:
a. a shortage of the product will develop. b. producers will stop supplying the product. c. some rationing device must then be instituted. d. a surplus of the product will develop. e. there will be an excess demand for the product.
In an open economy, the price of a bushel of corn is ________.
A. $1 B. $7 C. $3 D. $5
A balance of payments deficit occurs when:
A. exports exceed imports. B. the supply of a nation's currency exceeds the demand for the currency at the current exchange rate. C. the demand for a nation's currency exceeds the supply of the currency at the current exchange rate. D. the supply of a nation's currency is equal to the demand for the currency at the current exchange rate.