A monopoly produces widgets at a marginal cost of $10 per unit and zero fixed costs. It faces an inverse demand function given by P = 50 ? Q. Suppose fixed costs rise to $400. What happens in the market?
A. The firm will reduce its output and raise price.
B. The firm continues to produce the same output and charge the same price.
C. The firm will raise the price.
D. The firm will shut down immediately.
Answer: B
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Answer the following statement(s) true (T) or false (F)
1. Fiscal policy refers to the government's ability to print money. 2. Kobe beef, which some consider the best beef in the world, is produced in Japan and sold in the U.S. (in extremely limited quantities); this is an example of a U.S. import.
In the simultaneous move labor negotiation game:
a. The payoffs from bargaining hard are only higher if your opponent accommodates b. The payoffs from bargaining hard are only higher if your opponent bargains hard c. The payoffs are always higher if you bargain hard d. The payoffs are always higher if your opponent bargains hard