A Firm Has Discovered a New Kind of Nonfattening, Non-Habit-Forming

question 58

Multiple Choice

A firm has discovered a new kind of nonfattening, non-habit-forming dessert called zwiffle.It doesn't taste very good, but some people like it and it can be produced from old newspapers at zero marginal cost.Before any zwiffle could be produced, the firm would have to spend a fixed cost of $F.Demand for zwiffle is given by the equation q =12 - p.The firm has a patent on zwiffle, so it can have a monopoly in this market.

• A)The firm will produce zwiffle only if F is less than or equal to 36.
• B)The firm will not produce zwiffle if F > 12.
• C)The firm will produce 12 units of zwiffle.
• D)The firm will produce 9 units of zwiffle.
• E)None of the above.

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Definitions:

Lodging Markets

The segment of the hospitality industry that provides accommodations or places to stay to travelers.

Billboard Advertising

Billboard advertising is an outdoor advertising strategy that utilizes large-scale print advertisements to market products or services to passing pedestrians and drivers.

Resort Community

A residential area designed for recreation, leisure, and vacation activities, often featuring amenities such as hotels, beaches, and golf courses.

Excess Capacity

A situation where a firm is operating below its maximum output capacity, indicating resources are not being used efficiently.