A graph in the first quadrant is shown with price per gallon on the vertical axis, labeled from 0 to 2.5 in increments of 0.5, and quantity of gasoline in billions of gallons on the horizontal axis, labeled from 0 to 20 in increments of 2. Two lines are plotted. One is increasing from left to right and is labeled supply, and the other is decreasing from left to right and is labeled demand. The lines cross near the center of the graph at quantity 10 and price 1.5, and they are nearly perpendicular. Dashed horizontal reference lines are drawn from price 2.0 to the supply line, from price 1.5 to the intersection of the supply and demand lines, and from price 1.0 to the demand line. Vertical reference lines are drawn from quantity 6 to the intersection of the supply line with the horizontal reference line at price 1.0, from quantity 8 to the intersection of the demand line with the reference line at price 2.0, from quantity 10 to the intersection of the supply line, the demand line, and the reference line at price 1.5, from quantity 12 to the intersection of the demand line with the reference line at price 1.0, and from quantity 14 to the intersection of the supply line and the reference line at price 2.0. In the market depicted in the diagram above, if the government imposes a price ceiling of $1.00 per gallon on gasoline, which of the following will result?

The two firms in an industry are deciding whether to advertise. The profit to each firm depends on the other firm’s decision. The first entries in the matrix below indicate the profit earned, in millions of dollars, by Firm A; and the second entries indicate the profits earned, in millions of dollars, by Firm B. Table: Firm A and Firm B Payoff Matrix Nature View Firm A Advertise Do Not Advertise Advertise $7, $1 $5, $4 Do Not Advertise $3, $2 $2, $0 Based on the payoff matrix, which of the following is correct?

JC pizzeria has a year remaining on an unbreakable lease on its building, requiring a payment of $20,000 a year. If JC operates over the next year, it estimates that its revenues will be $200,000 and that its expenses, in addition to the lease, will be $190,000. Which of the following statements is true?

The cross-price elasticity of demand for flashlights and Good H is -2.5. This indicates which of the following?

The figure shows a graph with the horizontal axis labeled Quantity of Labor and the vertical axis labeled M P comma A P. There are 5 points on the horizontal axis labeled, from left to right, L 1, L 2, L 3, L 4, and L 5. There are 2 curves on the graph. One curve is labeled M P and begins to the left of L 1 above the horizontal axis, curves up to a maximum above L 2, and then curves down to cross the horizontal axis at L 5. The second curve is labeled A P and begins below the M P curve. The A P curve curves gently up and stays below the M P curve as it passes L 1 and L 2 until it reaches a maximum at L 3, and then curves gently down above the M P curve as it passes L 4 and L 5. The 2 curves intersect at a point with coordinate L 3. The graph above shows the marginal product (MP) and the average product (AP) of labor for a firm that uses labor as the only variable input and hires its labor in a perfectly competitive market. At which quantity of labor does marginal cost change from decreasing to increasing?

In the graph below, TC is total cost and TR is total revenue. The figure shows a graph with a horizontal axis labeled Output, a vertical axis labeled Dollar Sign, and an origin labeled zero. Five quantities appear on the horizontal axis and are labeled, from left to right Q sub one, Q sub 2, Q sub 3, Q sub 4, and Q sub 5. One point appears on the vertical axis, just above the origin, and is labeled G. Two lines appear on the graph. A straight line labeled T R begins at the origin and moves steadily up and to the right, and ends near the top of the graph, to the right of Q sub 5. A curve labeled T C starts from point G at the vertical axis , curves up and to the right, passes through the coordinates for the quantity Q sub one, begins to level as it intersects the T R line at a quantity Q sub 2, and increases in distance from the T R line as it moves up until it reaches the coordinate for the quantity Q sub 3, then decreases in distance from the T R line as it continues up and to the right, intersects the T R line at a quantity for Q sub 4, and ends above the T R line at a quantity of Q sub 5. At which level of output is profit maximized?

One difference between oligopolies and monopolistically competitive markets is that

“A graph in the first quadrant is shown with quantity in units on the horizontal axis and price on the vertical axis. Two lines are plotted. One is increasing to the right from the origin and is labeled supply, and the other is decreasing from left to right and is labeled demand. The lines cross near the center of the graph, and they are nearly perpendicular. A value 4 dollars is labeled on the vertical axis, and a value 10 is labeled on the horizontal axis. Dashed reference lines are drawn from these points on the axes to the point where the lines intersect.” In the market shown in the graph above, at a price of $5, there will be

Refer to the following diagram and assume a perfectly competitive market structure. At the price 0A, economic profits are A graph in the first quadrant is shown with price on the vertical axis and output per year on the horizontal axis. Three curves are plotted that are all concave up everywhere, decreasing on the left before reaching a minimum and increasing on the right. The first curve is labeled average total cost, and its minimum is near the center of the graph. The second curve is labeled average variable cost, which sits just below the average total cost curve and does not intersect it. The third curve is labeled marginal cost and it has its minimum in the lower left of the graph, increasing to the right and crossing first the average variable cost and then the average total cost curves. Five values A, B, C, D, and E are labeled from top to bottom on the vertical axis and dashed horizontal reference lines are drawn. A value F is labeled on the horizontal axis and a dashed vertical reference line is drawn, in addition to two more lines from unlabeled points, one to the left of F and one to the right. The lines from A and F intersect at point G above the minimums of the average total and variable cost curves. Continuing to the right along the line at A is point H at the intersection with the marginal cost curve and point I at the intersection with the average total cost curve. The lines from B and F intersect at point J above the minimums of the average total and variable cost curves. Continuing to the right along the line at B is point K at the intersection with the average total cost curve and point L at the intersection with the average variable cost curve. A vertical dashed line connects points K and H, and another connects points I and L. The lines from C and F intersect at point M at the intersection of the marginal cost and average total cost curves. The line from D intersects the unlabeled vertical line to the left of F at the intersection of the marginal cost and average variable cost curves. The line from E meets the marginal cost curve at its minimum.

The following questions refer to the graph below, which shows the cost curves of a firm. A graph in the first quadrant is shown with price on the vertical axis and quantity on the horizontal axis. Three curves are shown, all concave up everywhere, decreasing on the left before reaching a minimum and increasing to the right. The first curve is labeled long-run average total cost, which has its minimum near the center of the graph. The second curve is labeled short-run average total cost which has its minimum above and to the left of the long-run average total cost curve. The two curves touch, but do not intersect, to the right of the minimum of the long-run average total cost-curve, so the short-run average total cost curve is always above the other curve. The third curve labeled short-run marginal cost has its minimum in the lower left corner and intersects the short-run then the long-run average total cost curves to the right of the point where those two curves touch. A value P sub 1 is labeled on the vertical axis above all of the minimums and a horizontal reference line is drawn there, intersecting the long-run and short-run average total cost curves near the point where they touch before intersecting the short-run marginal cost curve. A value Q sub 1 is labeled on the horizontal axis with a vertical reference line drawn that intersects the long-run then short-run average total cost curves. If the firm produces Q1 units of output with two inputs, the firm will be experiencing which of the following in the short run and in the long run?