When marginal cost pricing occurs
A) price equals the additional cost society incurs in producing the next unit of an item.
B) the firm can only break even if it does not set price to marginal cost.
C) price equals average variable cost but exceeds average total cost.
D) the firm is at the shutdown point.
Answer: A
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Suppose Always There Wireless serves 100 high-demand wireless consumers, who each have a monthly demand curve for wireless minutes of QdH = 200 - 100P, and 300 low-demand consumers, who each have a monthly demand curve for wireless minutes of QdL = 100 - 100P, where P is the per-minute price in dollars. The marginal cost is $0.25 per minute. Suppose Always There Wireless charges $0.30 per minute. How many minutes will low-demand consumers purchase?
A. 60 B. 30 D. 170
In the real business cycle theory, during a period when output is falling,
a. workers are voluntarily giving up their jobs. b. the quantity supplied of labor is falling. c. aggregate productivity must be falling. d. all of the above. e. none of the above.
Refer to Scenario 12.1. What is the profit maximizing price of a monopolist?
A) $400 B) $600 C) $800 D) $900 E) none of the above
If a price ceiling is set above the current market clearing price, then
A) a surplus must immediately occur. B) a shortage must immediately occur. C) there will be incentives for black markets to develop. D) quantity demanded will remain equal to quantity supplied at the current market clearing price.