When firms in a U.S. industry outsource some of their production,
A) both U.S. labor demand and U.S. wages in the industry fall
B) U.S. labor demand falls, but U.S. wages are not affected.
C) U.S. labor demand remains unchanged, but U.S. wages fall.
D) U.S. labor demand falls, but U.S. wages increase.
A
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If a regulatory board wanted to make sure that a natural monopoly earned a normal rate of return, it should set price which is equal to: a. marginal cost
b. average fixed cost. c. average variable cost. d. average total cost.
You're called in as a consultant: Price is $24 . At a production level of 200 units, MC = MR, AFC = $6, and AVC = $16 . What do you advise this firm to do?
a. Increase output. b. Decrease output. c. Shut down operations. d. Stay at 200 units; the firm is earning $400 profit. e. Stay at 200 units; the firm is minimizing losses of $200.