Wendy's must decide whether to grow its own potatoes for French fries. Growing potatoes is a very different process from running a fast-food restaurant. Based on this information alone, should Wendy's grow its own potatoes?
a. No, because Wendy's managers have bounded rationality.
b. Yes, because Wendy's managers have bounded rationality.
c. No, because there is a small number of potato suppliers.
d. Yes, because there is a small number of potato suppliers.
e. No, because it is easy to observe the quality of potatoes.
A
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Supply curves generally slope upward because of all of the following reasons except one. Which is the exception?
a. Producers are willing to offer more of a good at higher prices. b. A higher price attracts resources from less-valued uses. c. Producers must be compensated for the rising opportunity cost of additional output. d. Producers have a greater incentive to sell more as the price increases. e. The price of a good usually must fall to induce an increase in quantity supplied.
In the long run, marginal cost must equal marginal revenue for a monopolistic competitive firm, but not at the minimum point of the long-run average cost curve
a. True b. False Indicate whether the statement is true or false