A firm with market power is producing a level of output at which price is $8, marginal revenue is $5, average variable cost is $6, and marginal cost is $10. In order to maximize profit, the firm should
A. increase output.
B. shut down.
C. keep price the same.
D. increase price.
E. decrease price.
Answer: D
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Firms in monopolistic competition have demand curves that are
A) horizontal. B) vertical. C) downward sloping. D) upward sloping. E) U-shaped.
The nominal exchange rate is 15 crowns per florin, the domestic price level is 6 florins/bottle, and the foreign price level is 2 crowns/bushel
(a) What is the real exchange rate? (b) What is the real exchange rate in the foreign country? (c) If the domestic price level rises to 8 florins/bottle, what must the nominal exchange rate become if the real exchange rate remains unchanged?
A ________ is known as a combination or cartel consisting of firms that place their assets in the custody of the board of trustees.
Fill in the blank(s) with the appropriate word(s)
Refer to the information provided in Figure 3.15 below to answer the question(s) that follow.
Figure 3.15Refer to Figure 3.15. The current price of a bag of pretzels is $1.10. You accurately predict that in this market,
A. price and quantity demanded increase, and quantity supplied decreases. B. price and quantity supplied decrease, and quantity demanded increases. C. price, quantity demanded, and quantity supplied decrease. D. price tends to remain constant, and quantity supplied increases.