The long-run average cost curve may initially slope downward due to
A) decreasing average fixed costs.
B) increasing marginal returns.
C) economies of scale.
D) All of the above.
C
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Refer to the diagrams. The demand for Firm A's product is:
A. perfectly elastic over all ranges of output.
B. perfectly inelastic over all ranges of output.
C. elastic for prices above $1 and inelastic for prices below $1.
D. inelastic for prices above $1 and elastic for prices below $1.
A logging company is considering logging an area for a current cost of $500 per acre to obtain a profit the next year for $600 per acre. The market rate of interest is 10 percent. Should the company make the investment?
A. Yes, the future value of the profit is greater than the present value of the cost B. No, the future value of the profit is less than the present value of the cost C. Yes, the present value of the profit is greater than the present value of the cost D. No, the present value of the profit is less than the present value of the cost