Which of the following is most likely to be a variable cost for a firm?
A) The interest payments made on loans
B) The franchiser's fee that a restaurant must pay to the national restaurant chain
C) The monthly rent on office space that it leased for a year
D) The payroll taxes that are paid on employee wages
D) The payroll taxes that are paid on employee wages
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Refer to Figure 7-1. The market equilibrium price is
A) $30. B) $25. C) $20. D) <$20.
Refer to the above figure. If an individual firm wants to maximize economic profits, it should
A) charge $5 for its product. B) charge more than $5 for its product since increasing the price will increase revenues. C) charge less than $5 for its product since a lower price will attract more customers. D) withdraw its product from the market forcing the market price up.