Which of the following statements is true about profit?
A) Profit refers to the revenue received from the sale of a quantity of goods.
B) The terms "accounting profit" and "economic profit" can be used interchangeably.
C) Profit is calculated by multiplying price and quantity sold.
D) Profit is the difference between revenue and cost.
D
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Price elasticity of supply is used to gauge
A) how responsive suppliers are to a change in demand. B) how responsive sales are to a change in input prices. C) how responsive suppliers are to price changes. D) how responsive suppliers are to changes in future prices.
Refer to Figure 16-2. Suppose Plato Playhouse price discriminates. Which of the following statements is true?
A) By charging two different prices, the theatre company has redistributed some profits from those who can pay higher prices to those who cannot, thereby increasing economic efficiency. B) By charging two different prices, the theatre company essentially allows those willing to pay higher prices to subsidize those who are not. C) Plato Playhouse will earn higher profits if it charges a single price—an average of the two prices— instead of charging two different prices to the two different groups of customers. D) By charging two different prices, the theatre company has redistributed some profits from those who can pay higher prices to those who cannot, thereby improving equity.
The inflation rate is a:
a. percentage decrease in price level. b. percentage increase in price level. c. sustained increase in relative prices. d. sustained decrease in relative prices. e. sudden increase in the weighted average of all prices.
The law of diminishing marginal utility explains why the demand curve is downward sloping. The law states that as you consume more of a good, the
a. total satisfaction you obtain from consuming the good falls b. added satisfaction you obtain from consuming an additional unit of the good increases at a diminishing rate c. marginal product increases at a diminishing rate d. satisfaction you obtain from each additional unit of the good you consume falls e. total satisfaction you obtain from each additional good you consume decreases at a diminishing rate