question
Marginal revenue is the:
answer
Change in revenue from producing and selling an additional unit of output.
question
The first derivative of total profit with respect to quantity is:
answer
Marginal profit.
question
Maximum profit occurs where:
answer
The slope of the total revenue function equals the slope of total cost.
question
At its current output level, a firm's marginal profit is positive. Therefore, it should:
answer
Increase output because MR > MC.
question
Total revenue is maximized at the point where:
answer
marginal revenue equals zero.
question
A company's demand function is Q = 800 - 2P. Its inverse demand function is:
answer
P = 400 - 0.5 Q
question
A firm faces the demand curve: P = 600 - 50Q. What is the firm's revenue maximizing price?:
answer
$300.
question
Ceteris paribus, an increase in the price of Coca-Cola would cause a(n):
answer
decrease in the quantity demanded for Coca-Cola.
question
Other things being equal, given that chicken and beef are substitute goods, an increase in the price of chicken will cause a:
answer
rightward shift in the demand curve for beef.
question
Assume that pencils and pens are substitutes. If the price of pencils rises, then we will see:
answer
A rightward shift in the demand curve for pens.
question
Given that digital music players are used to play music downloaded from the Inte2.rnet, a fall in the price of digital music players will lead to:
answer
an increase in the demand for downloaded songs
question
A firm's demand equation is given by Q = 36 −2.1P + .24Y, where Q is quantity, P is price, and Y is income. The coefficient of P ( i.e., −2.1) indicates that, all other things being held constant,:
answer
for a one dollar increase in price, quantity demanded would decline by 2.1 units.
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