A recent study on enrollment at a liberal arts college concluded that demand elasticity is 0.65 . The administration is considering a tuition increase to help balance the budget. The revenue-maximizing decision is to
a. decrease tuition, which should boost enrollment enough to balance the budget.
b. decrease tuition, which would bring in more revenue.
c. leave tuition as is-an increase would not help balance the budget.
d. increase tuition, which would generate more revenue.
D
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The above table shows the short-run total product schedule for the campus book store. When the book store hires the 3rd employee
A) the bookstore is still experiencing increasing marginal returns. B) the book store has already begun to experience diminishing marginal returns, but average product is still rising. C) both marginal and average product have already begun to decline. D) marginal product is at its maximum.
A basic tenet of the theory of the firm is that the firm's primary objective is to
A) stay out of debt. B) produce a given level of output at a specified cost. C) maximize economic profits. D) operate for the benefit of society.