If government forced a firm to charge a price equal to marginal cost in a situation where there are scale economies,
a. new firms would enter the industry.
b. the firm would be forced to go bankrupt.
c. positive economic profit would grow even larger.
d. marginal cost would exceed average cost.
b
Economics
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According to the case, price has a disproportionate effect on the bottom line relative to
A) demand changes. B) total and fixed costs. C) capital expenditures. D) the cost of capital.
Economics
An increase in the price of a close substitute for good A will:
a. increase demand, increase price and increase the quantity exchanged. b. increase demand, increase price and decrease the quantity exchanged. c. increase supply, increase price and increase the quantity exchanged. d. decrease demand, decrease price and decrease the quantity exchanged.
Economics