Some companies follow a strategy of sales maximization. They say that this puts them in close touch with their customers and they can better track the market, responding to needs more quickly. However, this increases costs because of the need to stock a wider variety of parts and sizes and colors, etc. What would make this strategy a profit-maximizing one?
The increase in revenue from this approach must exceed the increase in cost.
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With respect to the labor supply curve, the income effect
A) reinforces the substitution effect. B) lowers the opportunity cost of labor. C) raises the opportunity cost of labor. D) influences a person to work less as the wage rate increases.
Accounting profit minus implicit costs equals:
A. total revenues. B. fixed costs. C. explicit costs. D. economic profit.
The setting of the level of government spending and taxation by government policymakers is known as
A. fiscal policy. B. monetary policy. C. taxation policy. D. None of the above is correct.
Suppose that the only input used in the generation of solar energy is sunlight and has a zero cost. The average total cost of producing electricity is:
A. zero. B. equal to the marginal cost. C. equal to the average fixed cost. D. immeasurably high.