Refer to the above figure. Suppose demand is D2 and then increases to D3. Economic rent after the change is

In an economic model, an endogenous variable is

A) a stand-in for more complicated variables. B) determined by the model itself. C) determined outside the model. D) a variable that has no effect on the workings of the model.

If a firm finds itself operating in Stage I, it implies that

A) variable inputs are extremely expensive. B) it overinvested in fixed capacity. C) it underinvested in fixed capacity. D) fixed inputs are extremely expensive.