Refer to Figure 11-11. In the short run, if the firm sells fewer than 5,000 picture frames per month
A) it should produce with the scale of operation associated with ATCc.
B) it should produce with the scale of operation associated with ATCa.
C) it should produce with the scale of operation associated with ATCb.
D) it will experience constant returns to scale.
B
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If a monopolist's price is $50 per unit and its marginal cost is $25, then
A) to maximize profit the firm should continue to produce the output it is producing. B) to maximize profit the firm should decrease output. C) to maximize profit the firm should increase output. D) Not enough information is given to say what the firm should do to maximize profit.
The quantity of tickets demanded to the Super Bowl is always greater than the quantity supplied
Which of the following in the best explanation why the National Football League does not raise the price of tickets to the level where the quantity demanded equals the quantity supplied? A) The cost of raising the price and printing new tickets would exceed the revenue the NFL would receive from higher ticket prices. B) Raising the price would reduce the demand for tickets; there would then be a surplus and the game would not sell out. C) The demand for Super Bowl tickets is elastic; raising the price would reduce total revenue. D) The NFL is concerned that raising ticket prices would be considered unfair.