At output Q₂ and price P2, which of the following is TRUE? ○ A. P= MC-LRAC #SRATC. ○ B. The firm suffers some diseconomies of scale. ○ C. There are economic profits to attract new entrants. ○ D. Firm X is producing at its minimum efficient scale. ○ E. The firm has economies of scale. P2 P₁ $ per unit Using the graph below, determine which statement is TRUE. MC1 SRATC₁ Q1 Q₂ MC2 SRATC2 LRAC ✓ LEA Quantity

In choosing a production technology, how will firms react if one input becomes relatively more expensive?

How does fixed cost affect marginal cost? Why is this relationship important?

Concert Opportunity Cost 2 You were able to purchase two tickets to an upcoming concert for $100 apiece when the concert was first announced three months ago. Recently, you saw that StubHub was listing similar seats for $225 apiece. What does it cost you to attend the concert?

What is deflation?

What life cycle cost concept begins raising concerns by year 5 with any electric vehicle (EV)? If that issue affected resale value at year 5, would that affect perceived value-in-use? How exactly?

If a government gains from unexpected inflation when it borrows, why would it choose to offer indexed bands?

Continuing from Exercise 7.1, the films factory sits on land owned by the firm that it could rent for 30,000 per year. What was the films economic profit last year?

A firm had sales revenue of 1 million last year. It spent 600,000 on labor, 150,000 on capital and 200,000 on materials. What was the firms accounting profit?

Why does entry occur?