Figure 8.2 presents a firm’s marginal, average total, average fixed, and average variable cost curves. The firm minimizes average variable costs by producing ________ units.
Figure 9.2 shows the cost structure of a firm in a perfectly competitive market. If the market price is $10 and the firm chooses the profit maximizing output level, its profit is:
Price discrimination is related to elasticity because:
Under the conditions of monopolistic competition, if a firm is earning economic profits in the short run:
Recall the Application about the government blocking the merger between baby food makers Heinz and Beech-Nut to
answer the following question(s).
Recall the Application. Heinz, the second largest baby food producer tried to buy the Beech-Nut brand. Even though the combined firm would be less than half the size of the market leader Gerber, the government blocked the merger because:
Under a policy of average-cost pricing, a monopolist must charge the price at which its ________ cost curve intersects its ________ curve.
Recall the Application about how physical attractiveness affects wages to answer the following question(s).
Recall the Application. Relative to people of average appearance workers receive ________ wages if they are ________.
If the equilibrium wage is above the actual wage:
Figure 6.9 depicts a hypothetical fish market with a horizontal supply curve. Suppose the government imposes a tax of $2 per pound of fish, and the tax is paid in legal terms by producers. If the supply curve were positively sloped:
If the government imposes a maximum price in a market that is below the equilibrium price:
If demand is elastic, and the government decides to raise the tax on new cars. Then the price for cars will increase by a ________ amount and car buyers will bear a ________ share of the tax.
Which of the following statements about consumer choice theory is TRUE?
When at least one factor of production is fixed, firms require more and more workers to produce each additional unit of output. This describes: