Consider a monopoly where the inverse demand for its product is given by P = 50 ? 2Q. Total costs for this monopolist are estimated to be C(Q) = 100 + 2Q + Q2. At the profit-maximizing combination of output and price, monopoly profit is:
A. $32.
B. $92.
C. $128.
D. $64.
Answer: B
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The mid-point method of calculating elasticity is typically used because:
A. it is universally understood by all economists. B. it is a consistent way to estimate the elasticity of demand between two points on a demand curve, regardless of the direction of the movement. C. it is easier to calculate. D. the negative sign can then be ignored.
Assume that for Jim Swain, a corn producer from Illinois, the only source of farm income is from the production of corn. Swain produced 150,000 bushels of corn in 2012, receiving $5 per bushel. Assuming this producer had production expenses of $300,000,
and assuming the Consumer Price Index (CPI) for 2012 was 2.50, what was his real farm income for 2012? A) $450,000 B) $200,000 C) $750,000 D) $180,000
According to the above figure, the equilibrium price of DVDs is
A. $20. B. $10. C. $6. D. $14.
Refer to the diagram. Discretionary fiscal policy designed to expand GDP is illustrated by:
A. the shift of curve T 1 to T 2 .
B. the shift of curve T 2 to T 1
C. a movement from a to c along curve T 2 .
D. a movement from d to b along curve T 1