Scenario 15-6 The concert promoters of a heavy-metal band, WeR2Loud, know that there are two types of concert-goers: die- hard fans and casual fans. For a particular WeR2Loud concert, there are 1,000 die-hard fans who will pay $150 for a ticket and 500 casual fans who will pay $50 for a ticket. There are 1,500 seats available at the concert venue. Suppose the cost of putting on the concert is $50,000, which includes the cost of the band, lighting, security, etc.   Refer to Scenario 15-6. How much profit will the concert promoters earn if they set the price of each ticket at $150?  $75,000 $100,000 $150,000 $175,000

Total variable cost divided by quantity produced is   1.  average total cost.   2.  marginal cost.   3.  profit.   4.  None of the above is correct.

The intersection of a firm’s marginal revenue and marginal cost curves determines the level of output at which total revenue is equal to variable cost total revenue is equal to fixed cost total revenue is equal to total cost profit is maximized  

Karen’s cat causes Danny to Karen values her cat’s companionship at $300 per year. The cost to Danny of tissues and her allergy medication is $350 per year. Based on the Coase theorem,   Karen should pay Danny $350 for tissues and allergy medication Danny should pay Karen $325 to give away her cat Danny should move to another location Karen should pay Danny $400 so that she may keep her cat

An example of an explicit cost of production would be the   1.  cost of labor earnings from a previous job for an entrepreneur.   2.  lost opportunity to invest in capital markets when the money is invested in one’s business.   3.  lease payments for the land on which a firm’s factory stands.   4.  Both a and c are correct.

The term shutdown   and the term exit both refer to long-run decisions that a firm might make refers to a short-run decision that a firm might make, whereas the term exit refers to a long-run decision that a firm might make refers to a long-run decision that a firm might make, whereas the term exit refers to a short-run decision that a firm might make and the term exit both refer to short-run decisions that a firm might make  

An airline knows that there are two types of travelers: business travelers and vacationers. For a particular flight, there are 100 business travelers who will pay $600 for a ticket while there are 50 vacationers who will pay $300 for a ticket. There are 150 seats available on the plane. Suppose the cost to the airline of providing the flight is $20,000, which includes the cost of the pilots, flight attendants, fuel, etc. How much profit will the airline earn if it engages in price discrimination by charging each person their maximum willingness to pay?  $5,000 $40,000  $45,000 $55,000

A monopolist will always choose to produce the quantity where 1. MR = MC 2. MR = ATC 3. MC = ATC 4. MC = Price

Suppose that for a particular firm the only variable input into the production process is labor and that output equals zero when no workers are hired. In addition, suppose that marginal cost of the third worker hired is $40, and the average total cost when three workers are hired is $50. What is the total cost of production when three workers are hired?   1.  $50   2.  $90   3.  $120   4.   $150

Which of the following is a characteristic of a monopoly? low fixed costs as a portion of total costs free entry and exit barriers to entry declining marginal cost