Author Question: A sandwich shop owner has the following information: P = MR = 4, ATC = 2, AVC = 1, MC = 4, and Q = ... (Read 51 times)

leilurhhh · **on:** Jun 30, 2018

A sandwich shop owner has the following information: P = MR = 4, ATC = 2, AVC = 1, MC = 4, and Q = 500 . From this, she can determine:
a. her profits are not being maximized.
b. she has earned zero economic profits.
c. she has earned economic profits of 1,000.
d. she has earned economic profits of 1,500.
e. she should sell fewer sandwiches.

Question 2

If the economy is in recession and the number of used baby clothing stores increases, then:
a. used baby clothes are a necessity.
b. used baby clothes are an inferior good.
c. used baby clothes are a normal good.
d. new baby clothes are a luxury.
e. used baby clothes have price-elastic demand.