A firm earns an operating profit if
a. price equals marginal cost.
b. revenues exceed variable costs of production.
c. price is less than average variable costs of production
d. revenues equal fixed costs.
Answer: b. revenues exceed variable costs of production.
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When a German company purchases a U.S. company for $20 million, in the balance of payments the value of that transaction is recorded in the
A) current account. B) investment account. C) official purchases account. D) capital and financial account. E) purchase account.
A significant downside to network externalities is that
A) firms may network with unethical suppliers or distributors. B) there may be large switching costs to firms changing technologies. C) there may be large switching costs to consumers of changing products so that consumers end up using products with inferior technologies. D) the costs of using celebrity endorsements may be very high.