A firm's profit is
a. greater if it is a corporation rather than if it is a sole proprietorship
b. higher if it raises its price than if it does not
c. lower if it lowers its price than if it does not
d. never taxed by the government
e. its revenue minus its costs
E
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A company invested $400,000 in a technology that reduced the overall costs of production by reducing their cost per unit from $2 to $1.85 . Later, a manager has an opportunity to outsource production to another company at a cost per unit of $1.75 . If you are the manager, you a. should consider the $400,000 as a sunk cost, not relevant to the decision
b. should reduce his effort by ignoring any new developments and letting the production run as it is. c. should ignore the $400,000 fixed cost. d. Both A & C
If demand is perfectly inelastic, the demand curve is vertical, and the price elasticity of demand equals 0
a. True b. False Indicate whether the statement is true or false