When carmakers began to cut costs of producing cars by designing the chassis, engines, and transmissions so that different models could be produced on the same assembly line, production costs fell $240 per car. This change caused car makers' short-run average cost curves to:
A. remain unchanged, though there was a movement along the short-run average cost curve.
B. shift down.
C. remain unchanged; only the long-run average cost curve was affected.
D. shift up.
Answer: B
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Microsoft wants to calculate the effect of a worldwide 5% price cut on its sales of Excel to clients in different countries. Microsoft sells Excel at different prices in U.S., Japan and Europe. Before the price cut U.S
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