A perfectly competitive firm producing 100 units of output per period finds that: Average total cost is $20; Average variable cost is $12; Marginal cost is $18 and increasing; Price of the product is $15. This firm should
a. produce more output
b. raise the price of its product
c. reduce production without shutting down
d. shut down (reduce output to zero)
e. do nothing (it is currently maximizing profit)
C
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Under monopsony, the marginal factor cost of a worker is equal to
A) the additional worker's wage rate only. B) the additional worker's wage rate plus the increase in the wages of all other existing workers. C) the increase in the wages of all other existing workers. D) the difference between the worker's wage rate and the lower wage rate received by workers who have already been hired.
Saccharin and aspartame are both low-calorie substitutes for sugar. If saccharin is found to cause cancer,
a. the price of aspartame will increase b. the price of sugar will decrease c. the price of saccharin will increase d. the demand curves for aspartame and sugar will shift leftward e. aspartame and sugar will be complements