A Firm Facing a Downward-Sloping Demand Curve Sells 50 Units

question 43

Multiple Choice

A firm facing a downward-sloping demand curve sells 50 units of output at $10 each.The firm's average revenue is _____

• A)$500.
• B)more than $10 but less than $500.
• C)$10.
• D)less than $10 but more than zero.
• E)zero.

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Definitions:

Supply-siders

Economists who believe reducing barriers for people to produce (supply) goods and services, like lower taxes, will stimulate economic growth.

Curing Recessions

Efforts and policies aimed at stimulating economic recovery and ending periods of economic decline.

Keynesian Economics

As formulated by John Maynard Keynes, this school believed the private economy was inherently unstable and that government intervention was necessary to prevent recessions from becoming depressions.

Crude Quantity Theory

A theoretical framework suggesting that changes in money supply have a direct, proportional effect on the price level in an economy.