The long-run equilibrium for a firm in an information product industry exists at a point at which
A. marginal cost exceeds marginal revenue.
B. average total cost is minimized.
C. the demand curve is tangent to the average total cost curve.
D. the demand curve crosses the marginal cost curve.
Answer: C
You might also like to view...
In 2008, a former Intel engineer has been charged with stealing trade secrets worth $1 billion. Intel owns 90 percent of the worldwide market for microprocessors, AMD has the rest
Conducting R&D is very expensive so suppose that each of these firms can either steal R&D or develop their own R&D. If both firms develop their own R&D, economic profit will be $50 million each. If one company steals R&D, that firm earns $100 million in economic profit while the other firm earns $10 million. If both firms steal R&D, each firm breaks even. What is NOT true about this game? A) The outcome will not be a dominant strategy equilibrium. B) A strategy is to steal R&D. C) A firm will make more profit if it steals R&D. D) A strategy is to conduct R&D.
Refer to the graph above. Points A, B, and C represent ________, ________, and ________, respectively
A) equilibrium wage rate after migration from home to foreign has occurred; the wage rate in foreign before migration; the wage rate in home before migration B) equilibrium wage rate after migration from foreign to home has occurred; the wage rate in home before migration; the wage rate in foreign before migration C) the wage rate in home before migration; the wage rate in home after migration; the wage rate in foreign after migration D) the global wage rate before migration; the wage rate in foreign after migration; the wage rate in home after migration E) the global wage rate before migration; the wage rate in home after migration; the wage rate in foreign after migration
In the prisoner's dilemma game:
A. a cooperative strategy can lead to a more beneficial outcome for both players. B. a noncooperative strategy will lead to a positive-positive outcome. C. a stable outcome is impossible. D. neither player has a dominant strategy.
Suppose that when a perfectly competitive firm produces 500 units of output a day, it earns an economic loss. If the price of each unit of output is $1.50, then, in the short run, it's clear that this firm:
A. is not maximizing its profit. B. should shut down. C. should produce more than 500 units a day. D. should not shut down if its total variable cost is less than $750.