How is marginal revenue product reflected in “winner-take-all” markets such as in the music industry?
What will be an ideal response?
In the music industry, there is stiff competition to become a superstar. The superstars attract a large following who are willing to pay high prices for concert tickets and purchase many of the CDs produced by the artists. As a consequence, the artists’ work generates a great deal of revenue for the company. These superstars also have high earnings that reflect their high marginal revenue product.
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The short-run Phillips curve suggests what policy making implications?
A) Using discretionary policies, it may be possible to achieve just the right unemployment and inflation mix. B) Active policy making does not yield any predictable results. C) Maintaining both the inflation and unemployment rates at low levels is possible if policy makers will rely solely on nondiscretionary policy making. D) Passive policy making is more effective than active policy making.
Profit is the difference between
A) total revenue and total explicit cost. B) total revenue and total cost. C) total revenue and variable cost. D) marginal revenue and marginal cost.