An HVAC company is selling heating and cooling equipment. It has separate sales and marketing units. The marketing unit would want to
a. Price aggressively to ensure sales are made
b. Price less aggressively to ensure that profitable sales are made
c. Price at cost to maximize sales
d. None of the above
b
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Sunk costs are irrelevant to economic decisions because
A) they are merely opportunity costs rather than monetary expenditures. B) they cannot affect a firm's net revenue. C) they do not appear on financial statements. D) they represent no opportunity for choice.
In the classical range of the aggregate supply curve, greater spending for consumer and investment goods results in:
a. stagflation. b. more unemployment. c. greater output. d. a higher price level.
When regulating a natural monopoly, government officials
a. can set an efficient price, but the firm will suffer a loss b. can arrange a Pareto improvement by leaving the firm alone c. should force the firm to set a price equal to minimum marginal cost d. should force the firm to set a price equal to minimum long-run average total cost e. will increase efficiency if they force the firm to produce where MR = MC.
Pepsi One is a close substitute for Diet Coke. When Pepsi introduced Pepsi One, the price elasticity of demand for Diet Coke ________ and Coke's ability to raise revenues through price increases ________.
A. decreased; was reduced B. had no effect; was reduced C. increased; was reduced D. increased; increased