What is a firm's markup? What does it show?
What will be an ideal response?
A firm's markup is the amount by which price exceeds marginal cost. A markup shows that buyers pay more than the firm's marginal cost.
You might also like to view...
Which of the following is most likely to increase an individual's current spending?
A) Paying back a loan today B) Borrowing money today C) Depositing money today D) Withdrawing money in the future
Because information is scarce
A) helps explain why equity contracts are used so much more frequently to raise capital than are debt contracts. B) monitoring managers gives rise to costly state verification. C) government regulations, such as standard accounting principles, have no impact on problems such as moral hazard. D) developing nations do not rely heavily on banks for business financing.
If an additional dollar spent on monitoring would reduce shirking by 10 minutes, then the firm will increase the worker's wage by $1 if this caused
A) shirking to increase by less than 10 minutes. B) shirking to decrease by more than 10 minutes. C) shirking to decrease by less than 10 minutes. D) monitoring to become unnecessary.
During the Financial Crisis of 2007-2008, investors demanded much higher risk premiums in their investments. This caused the SML to:
A. Shift up B. Shift down C. Become steeper D. Become flatter