A textbook publisher is in monopolistic competition. If the firm spends nothing on advertising, it can sell no books at $100 a book, but for each $10 cut in price, the quantity of books it can sell increases by 20 books a day
The firm's total fixed cost is $2,400 a day. Its average variable cost and marginal cost is a constant $20 per book. If the firm spends $1,200 a day on advertising, it can increase the quantity of books sold at each price by 50 percent. Compared to the situation if it does not advertise, if the firm advertises, its economic profit A) increases by $400.
B) decreases by $400.
C) doubles.
D) is the same as with no advertising.
A
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How would you define a currency board?
A) the process by which non-pegged interest rates are allowed to fluctuate B) the stockpiling of international reserves by developing countries C) using the dollar to carry out all domestic transactions, making the domestic currency a currency in name alone D) a constraint placed on monetary policy E) The monetary bases is backed entirely by foreign currency and the central bank holds no domestic assets.
Under the new Constitution in 1789, the states gained the sovereign power to
(a) levy taxes. (b) power and issue money. (c) "regulate" the value of money. (d) create corporations by special franchise.
If a firm makes zero economic profit, then the firm
A) has no incentive to stay in the industry. B) is better of exiting the industry. C) is indifferent between staying and exiting the industry. D) will shut down.
The Bureau of Labor Statistics produces data on unemployment and other aspects of the labor market from a regular survey of about 60,000 households, called the Current Population Survey
a. True b. False Indicate whether the statement is true or false