Author Question: Suppose fish steak and spaghetti are the only alternatives available during lunch hours at an office ... (Read 22 times)

jjjetplane · **on:** Jun 30, 2018

Suppose fish steak and spaghetti are the only alternatives available during lunch hours at an office cafeteria. If a nominal change in the price of fish steak brings about a prominent change in the demand for spaghetti we can conclude that the latter has a high demand elasticity.
Indicate whether the statement is true or false

Question 2

Assume that a firm's marginal revenue curve intersects the rising portion of its marginal cost curve at 500 units of output. At this output level, a profit-maximizing firm's total cost of production is 1,000 . If the price of the product is 5 per unit, the total revenue earned by the firm will be:
a. 1,500.
b. 250.
c. 500.
d. 2,500.
e. 1,000.