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Author Question: Suppose the price of a product is less than its average variable cost. When the firm's fixed ... (Read 155 times)

naturalchemist

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on: Jun 30, 2018
Suppose the price of a product is less than its average variable cost. When the firm's fixed obligations are completely ended, it will now most likely:
 a. make an economic profit.
  b. go out of business.
  c. expand to a bigger operation.
  d. continue to be shut down.
  e. break even.

Question 2

In order to prove that Dr. Pepper and 7-Up are substitutes, the FTC should test the ____ and get a ____.
 a. price elasticity of demand; number less than 1
  b. income elasticity; positive number
  c. price elasticity; negative number
  d. price elasticity of demand; number greater than 1
  e. cross-price elasticity; positive number


sierrahalpin

  • Sr. Member
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  • Posts: 329
Reply #1 on: Jun 30, 2018
Answer to Question 1

b

Answer to Question 2

e


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