Questions from Managerial Economics

Q: If a firm in a perfectly competitive industry is experiencing average revenues

If a firm in a perfectly competitive industry is experiencing average revenues greater than average costs, in the long-run a. some firms will leave the industry and price will rise b. some firms will...

Q: A sudden decrease in the market demand in a competitive industry leads

A sudden decrease in the market demand in a competitive industry leads to a. losses in the short-run and average profits in the long-run b. above average profits in the short-run and average profits...

Q: Changes in prices of a good causes a. movement along

Changes in prices of a good causes a. movement along the demand curve b. movement along the supply curve c. no movement along either curve d. Both a and b

Q: If the market for a certain product experiences an increase in supply

If the market for a certain product experiences an increase in supply and a decrease in demand, which of the following results is expected to occur? a. Both the equilibrium price and the equilibrium q...

Q: Joe runs the Service Division for a car dealership. The overall

Joe runs the Service Division for a car dealership. The overall dealership has profit of $10 million on sales of $100 million and costs of $90 million. Joe’s division contributed $9 million in sales a...

Q: When demand for a product falls, which of the following events

When demand for a product falls, which of the following events would you NOT necessarily expect to occur? a. A decrease in the quantity of the product supplied. b. A decrease in its price. c. A decr...

Q: Suppose a recent and widely circulated medical article has reported new benefits

Suppose a recent and widely circulated medical article has reported new benefits of cycling for exercise. Simultaneously, the price of the parts needed to make bikes falls. If the change in supply is...

Q: Suppose there are nine sellers and nine buyers in a competitive market

Suppose there are nine sellers and nine buyers in a competitive market, each willing to buy or sell one unit of a good, with values {$10, $9, $8, $7, $6, $5, $4, $3, $2}. Assuming there are no transac...

Q: If the government imposes a price floor at $9 (i

If the government imposes a price floor at $9 (i.e., price must be $9 or higher) in the above market, how many goods will be traded? a. Five b. Four c. Three d. Two

Q: Say the average price of a new home in Lampard City is

Say the average price of a new home in Lampard City is $160,000. The local government has just passed new licensing requirements for housing contractors. Based on possible shifts in demand or supply...