Suppose a monopolist's costs and revenues are as follows: ATC = $50; MC = $40; MR = $45; P = $55. The firm should
A) increase output and decrease price.
B) decrease output and increase price.
C) not change output or price.
D) shut down.
Answer: A
Economics
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If a $2 billion increase in investment brings about a $5 billion increase in equilibrium expenditure, we know that the multiplier equals
A) 4. B) 3. C) 10. D) 5. E) 2.5.
Economics
Red Stone Creamery currently hires 5 workers. When it added a 6th worker, its output actually fell. Which of the following statements is true?
A) The total product becomes negative. B) The average product of the sixth worker is negative. C) The sixth worker is not as skilled as the fifth worker. D) The marginal product of the sixth worker must be negative.
Economics