This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: A textbook publisher is in monopolistic competition. If the firm spends nothing on advertising, it ... (Read 83 times)

LCritchfi

  • Hero Member
  • *****
  • Posts: 519
on: Jun 29, 2018
A textbook publisher is in monopolistic competition. If the firm spends nothing on advertising, it can sell no books at 100 a book, but for each 10 cut in price, the quantity of books it can sell increases by 20 books a day.
 
  The firm's total fixed cost is 2,400 a day. Its average variable cost and marginal cost is a constant 20 per book. If the firm spends 1,200 a day on advertising, it can increase the quantity of books sold at each price by 50 percent. Compared to the situation if it does not advertise, if the firm advertises, its economic profit A) increases by 400.
  B) decreases by 400.
  C) doubles.
  D) is the same as with no advertising.

Question 2

There is a technological advance in a perfectly market. Which of the following statements is NOT true?
 
  A) As more firms begin to use the new technology, the market supply increases and the price falls.
  B) Technological change brings permanent gains to producers and temporary gains to consumers.
  C) In the new long-run equilibrium, all the old-technology firms have exited.
  D) In the long-run equilibrium, competition eliminates any short-run economic profit.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

chinwesucks

  • Sr. Member
  • ****
  • Posts: 341
Reply #1 on: Jun 29, 2018
Answer to Question 1

A

Answer to Question 2

B


LCritchfi

  • Hero Member
  • *****
  • Posts: 519
Reply #2 on: Jun 29, 2018
Correct answers!


chinwesucks

  • Sr. Member
  • ****
  • Posts: 341
Reply #3 on: Jun 29, 2018
Great! Please up vote :D


« previous next »
 

Did you know?

Throughout history, plants containing cardiac steroids have been used as heart drugs and as poisons (e.g., in arrows used in combat), emetics, and diuretics.

Did you know?

Nearly all drugs pass into human breast milk. How often a drug is taken influences the amount of drug that will pass into the milk. Medications taken 30 to 60 minutes before breastfeeding are likely to be at peak blood levels when the baby is nursing.

Did you know?

In the United States, there is a birth every 8 seconds, according to the U.S. Census Bureau's Population Clock.

Did you know?

Approximately 70% of expectant mothers report experiencing some symptoms of morning sickness during the first trimester of pregnancy.

Did you know?

The cure for trichomoniasis is easy as long as the patient does not drink alcoholic beverages for 24 hours. Just a single dose of medication is needed to rid the body of the disease. However, without proper precautions, an individual may contract the disease repeatedly. In fact, most people develop trichomoniasis again within three months of their last treatment.

Competition among Paramecium species. Competition among Paramecium species.
Succession in the intertidal zone involves colonization and competition for limited space among spec Succession in the intertidal zone involves colonization and competition for limited space among spec
A horse and rider in dressage competition at the Olympics A horse and rider in dressage competition at the Olympics
(a) Male competition can be fierce. (b) This male baboon has bite wounds suffered in competition wit (a) Male competition can be fierce. (b) This male baboon has bite wounds suffered in competition wit
One-handed kneading. Tissues are lifted with the whole hand in firm contact. One-handed kneading. Tissues are lifted with the whole hand in firm contact.
Advertising Break-even Question Advertising Break-even Question
Video: Congenital Heart Defects Animation

For a complete list of videos, visit our video library