The pricing rule MR=MC holds for

The pricing rule MR=MC holds for
 a. All firms
 b. Single product firms
 c. Multiple product firms
 d. None of the above

QUESTION 2

A hidden cost fallacy can be avoided
 a. by ignoring the opportunity costs to using a capital
 b. by ignoring the cost of capital
 c. by taking all capital costs into account including the cost of equity
 d. none of the above

QUESTION 3

On average, if demand is unknown and costs of underpricing are _______ than the costs of overpricing, then err on the side of_________.
 a. Smaller; overpricing
 b. Smaller; underpricing
 c. Larger; underpricing
 d. None of the above

QUESTION 4

The fixed-cost fallacy occurs when
 a. A firm considers sunk costs in making decisions
 b. A firm ignores relevant costs
 c. A firm considers overhead or depreciation costs in making decisions
 d. Both a and c

QUESTION 5

After firm A acquired firm B, it lowered the prices for the goods produced by both firms. This can increase profits if the goods are
 a. Substitutes
 b. Complements
 c. Not related
 d. None of the above

QUESTION 6

A manager invests 400,000 in a technology that should reduce the overall costs of production. The company managed to reduce their cost per unit from 2 to 1.85 . After the investment has been made, the 400,000 investment is
 a. Considered sunk costs, not relevant in further decision making
 b. Considered sunk costs, but still relevant in further decision making
 c. Considered a loss
 d. Considered a profit

QUESTION 7

After firm A acquired firm B, it raised the prices for the goods produced by both firms. This can increase profits if those goods are
 a. Substitutes
 b. Complements
 c. Not related
 d. None of the above