For a perfectly competitive firm, the price of its good is equal to the firm's marginal revenue because
A) information about price changes is hard to come by for small sellers.
B) price and marginal revenue are the same economic concepts.
C) individual perfectly competitive firms cannot influence the market price by changing their output.
D) the firm's total revenue cannot be changed by anything the firms can do.
E) there are only a small number of firms in the market.
C
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Suppose you are on a committee seeking to increase revenue from your city's bus system. If demand is _______, you would recommend raising the fare
a. perfectly elastic b. elastic c. unitary elastic d. inelastic
When budgets and information about costs and asset allocation is prepared for use by the managers of a business, which functional area is responsible for these items?
A. pay-off B. constant C. refund fraction D. finance
Investing all your money in one company is an example of:
A. risk aversion. B. risk diversification. C. risk pooling. D. None of these statements is true.
Refer to Scenario 9.5 below to answer the question(s) that follow. SCENARIO 9.5: Investors put up $520,000 to construct a building and purchase all equipment for a new restaurant. The investors expect to earn a minimum return of 10 percent on their investment. The restaurant is open 52 weeks per year and serves 900 meals per week. The fixed costs are spread over the 52 weeks (i.e. prorated weekly). Included in the fixed costs is the 10% return to the investors and $1,000 per week in other fixed costs. Variable costs include $1,000 in weekly wages and $600 per week for materials, electricity, etc. The restaurant charges $3 on average per meal. Refer to Scenario 9.5. Weekly total revenue is
A. $1,600. B. $2,000. C. $2,700. D. $3,600.