Macroeconomics

The positively-sloped part of the long-run average total cost curve is

The positively-sloped part of the long-run average total cost curve is due to which of the following? A) Diseconomies of scale. B) Diminishing returns. C) The firm being able to take advantage of large-scale production techniques as it expands its output. D) The increase in productivity that results from specialization.   ANSWER A

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Date: September 10th, 2020

Assume a monopolistically competitive firm comes up with a new innovat

Assume a monopolistically competitive firm comes up with a new innovation that allows it to earn above-normal economic profits. Given the nature of the market in which it operates, over time those profits will be competed away as new competitors enter the market. Indicate whether the statement is true or false   ANSWER TRUE

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Date: September 10th, 2020

The primary objective of a cartel is to: A) maximize the amount of pr

The primary objective of a cartel is to: A) maximize the amount of profit received by each member of the organization. B) maximize the joint profits of the members of the organization. C) ensure each member of the organization some minimum amount of profit. D) maximize the average profits of the members of the organization. […]

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Date: September 10th, 2020

Long-run average cost is defined as: A) the minimum average cost of p

Long-run average cost is defined as: A) the minimum average cost of producing any level of output when all inputs are variable. B) the minimum average cost of producing any level of output when the amount of capital is varied and all other inputs are held constant. C) the average of the short-run costs associated […]

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Date: September 10th, 2020

Which of the following statements concerning the long-run average cost

Which of the following statements concerning the long-run average cost (LRAC) curve is correct? A) The LRAC curve represents the least-cost input combination of inputs for producing each level of output. B) The LRAC curve is derived from a series of short-run marginal cost curves. C) The short-run cost curve at the minimum point of […]

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Date: September 10th, 2020

The success of a predatory pricing strategy in an oligopolistic market

The success of a predatory pricing strategy in an oligopolistic market depends on all of the following except: A) the number of firms operating in the industry prior to enactment of the policy. B) how far the predatory price is below cost. C) the period of time for which the predatory price is in effect. […]

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Date: September 10th, 2020