For the monopoly in the above figure, if the firm is currently producing 700 units, which of the following is correct?
A) It could earn higher profits if it produced more units each day.
B) It could earn higher profits if it produced fewer units each day.
C) It is maximizing its profits.
D) It is incurring a loss.
B
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Redland produced 10 million tonnes of wheat in a certain year using a given stock of capital and efficiency units of labor
It was able to increase production to 15 million tonnes within two years without any increase in its capital stock or the number of efficiency units of labor. Suppose wheat is the only good produced in Redland. What is likely to be the reason behind the increase in production? Explain with a suitable diagram.
For Product X, the income elasticity of demand is -2.56. Which of the following is therefore TRUE?
A) Product X is a necessity. B) Product X is a luxury. C) Product X is an inferior good. D) Product X is a normal good.