Walter builds birdhouses. He spends $5 on the materials for each birdhouse. He can build one in 30 minutes. He is semi-retired but earns $8 per hour at the local hardware store. He can sell a birdhouse for $20 each. An economist would calculate the total profit for one birdhouse to be

If an oligopolist is faced with a marginal revenue curve that has a gap in it, we may assume that:

A. it is colluding with its rivals to maximize joint profits. B. its demand curve is kinked. C. it is selling a standardized product. D. it is selling a differentiated product.

On a price/quantity graph, a straight horizontal demand curve

a. has zero price elasticity. b. is perfectly elastic. c. is perfectly inelastic. d. is perfectly unit elastic.