You are the owner of an art supply store, selling both paint and paintbrushes. In order to maximize total sales you should
a. Decrease the price on the paint only
b. Decrease the price on paintbrushes only
c. Decrease the price on both the paint and the paintbrushes
d. Increase the price on both the paint and the paintbrushes
c
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In the figure above, when the market is in equilibrium, total consumer surplus on all the CDs bought will be
A) greater than $30 million. B) less than at any other price. C) $20 million. D) less than $15 million.
Balance of payments crises under fixed exchange rates occur because of
A) government policies that are inconsistent with fixed exchange rates. B) punitive currency wars. C) global inflation and trade imbalances due to war. D) excessive exports and imports that overload the global system. E) monotonic expansion in global currency volume.
Thomas Edison once said that he began making real profit on light bulbs when he dumped his surplus on the European market at less than the “cost of production.” From this we can deduce Edison
A. did not want to maximize profit. B. understood the difference between marginal and average cost. C. had a different definition of the term “profit.” D. did not understand the difference between fixed and variable cost.
When the game does reach the Nash Equilibrium, the payoffs for both stores will be
a. Megastore $95 and Superstore $80 b. Megastore $305 and Superstore $55 c. Megastore $65 and Superstore $285 d. Megastore $165 and Superstore $115