Microsoft hires marketing and sales specialists to decide what prices it should set for its products, whereas a wealthy corn farmer in Iowa, who sells his output in the world commodity market, does not. Why is this so?
A) because unlike Microsoft, the wealthy corn farmer is probably a monopolist
B) because the wealthy corn farmer is a price taker who chooses his optimal output independently of market price but Microsoft's optimal output depends on the price it selects
C) because Microsoft could potentially lose sales if it sets prices indiscriminately
D) because Microsoft is large enough to hire the best people in the field
Question 2
Refer to Figure 12-6. Which of the following statements is true?
A) Jason should produce where MC equals 3 (point d) where he will minimize his losses.
B) Jason cannot earn a profit from selling any number of apples.
C) Jason should produce where MC equals 3 (point d) where he will maximize his profit.
D) Jason should produce where the distance between MC and his demand curve is greatest (point b).
Prices for Cotton and for Slaves, 1802–1860
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