If a firm shuts down in the short run, then
a. total revenue and total cost drop to zero
b. total revenue drops to zero, but the firm must still pay its fixed cost
c. total revenue drops to zero, but the firm must still pay some variable cost
d. total cost drops to zero, but the firm still earns some residual revenues
e. neither total revenue nor total cost drops to zero
B
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After a $5 million ad campaign, Coca-Cola measured its effectiveness by calculating the cross elasticity of demand between Coke and Pepsi. A successful campaign would be indicated if the cross elasticity went from
a. 0.9 to 0.5. b. 0.9 to 1.5. c. ?0.5 to ?0.2. d. ?0.9 to ?1.5.
Your company has recently requested that you travel to Dhaka, Bangladesh, to work on negotiations for a new factory to be located in one of the port cities. Your travel agent provides a list of several hundred local hotels and a Sheraton. In this case, the Sheraton brand-name is likely to be used as a signal of
a. perceived differences that are not likely to exist among your various options. b. quality when quality cannot be easily judged. c. inefficiency in markets characterized by recognizable brand names. d. the quality of general lodging accommodations in Dhaka.