The motive that drives firms to enter or exit an industry is
A) opportunity costs.
B) diseconomies of scale.
C) economic profit.
D) accounting costs.
Answer: C
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Suppose that there are five bottles of lemonade, each of which gives a consumer the same level of utility. According to the law of diminishing marginal utility, how can the consumer receive the highest utility?
a. Consume all five bottles in the next hour b. Consume all five bottles today c. Consume all five bottles in one day next week d. Consume two bottles today and three tomorrow e. Consume one bottle each day for the next five days
For a monopolist, the quantity effect:
A. is the increase in revenues from selling a greater quantity at a lower price. B. is the decrease in revenues from selling a greater quantity at a lower price. C. is always outweighed by the price effect. D. always outweighs the price effect.