Suppose that when the price of oranges decreases, Sarita decreases her purchases of peaches. To Sarita,
A) oranges and peaches are normal goods. B) oranges and peaches are substitutes.
C) oranges and peaches are complements. D) oranges and peaches are inferior goods.
B
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Which of the following is always TRUE in the short run for a perfectly competitive firm that is maximizing economic profits?
A) P = d = MR = MC = AVC B) P = d = MR = MC C) P = d = MR = Q D) MR = MC = Q
Refer to Scenario 9.9 below to answer the question(s) that follow. SCENARIO 9.9: Sponsors invest $250,000 in a new greeting card business on the promise that they will earn a return of 10% per year on their investment. The business sells 52,000 greeting cards per year. The fixed costs for the business include the return to investors and $79,000 in other fixed costs. Variable costs consist of wages ($1,000 per week) plus materials, electricity, etc. ($3,000 per week). The business is open 52 weeks per year.Refer to Scenario 9.9. The business is earning exactly a normal profit. Thus, the average price per greeting card must be
A. $1.52. B. $2. C. $4. D. $6.