From the price-setter's point of view, the appropriate cost of a good is
A) the inventory cost.
B) the marginal cost.
C) the sunk cost.
D) the wholesale cost.
B
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While eating at Alex's "Pizza by the Slice" restaurant, Clara experiences diminishing marginal utility. She received 10 utils from consuming the first slice of pizza and would only receive 5 utils from consuming a second slice, at the same price. Based on this information we can conclude that
A. Even if Clara buys a second slice, she will not buy a third slice. B. Clara will not eat a second slice, even if it is given to her at no charge. C. Alex may have to lower the price to convince Clara to buy a second slice. D. Clara will definitely want to buy a second slice of pizza.
The total revenue curve of a monopolist is at its maximum point when:
A) marginal cost is zero. B) marginal cost is positive. C) marginal revenue is zero. D) marginal revenue is positive.
Perfect capital mobility implies
A. an FE curve that is horizontal. B. high domestic interest rates relative to foreign interest rates. C. a vertical FE curve. D. an FE curve that is steeper than the LM curve.
As new firms enter a monopolistically competitive industry, the demand curve facing each existing firm will
A. shift to the left, but the elasticity of demand will not be affected. B. not be affected because the new firms do not produce a perfect substitute for its product. C. shift to the left and become more elastic because there are now more substitutes for its product. D. shift to the left and become less elastic because there are now more substitutes for its product.