Question

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Question 41 0.4 pts Preston shops frequently at his favorite store, Fully Clothes. He and other like-minded consumers are willing to pay a much higher price than they would at competing stores because Fully Clothes best suits their particular preferences. Poor management causes Fully Clothes to go out of business What is likely to happen to Fully Clothes' customers' demand curves? a movement along the curve to the left O a shift of the curve to the right no change due to lack of product differentiation a movement along the curve to the right O a shift of the curve to the left Question 42 0.4 pts The city of Tustin, California, has spent $10 million on a project to build a new community college. It will cost the city $40 million to finish the project. When making the decision to continue the project, the city's chief economist tells the city council to ignore the $10 million because O the $10 million is a variable cost. $10 million is only one-fifth of the entire project cost. O the $10 million can be recovered if the project is stopped. O the $10 million is a sunk cost. O the $10 million doesn't factor into the total cost of the project.

Answer 1

41) no change due to lack of product differentiation

Since all store competitive there is no change in demand curve.

42) the 10 million is a sunk cost

10 million has already been invested and cannot be recovered now.

43) network

In the presence of network externality, consumption of the good by one user increases the demand for other users.

44) 20500

Economic profit= 80000 - 5000 - 2000 - 1000 - 1500 - 50000

= 20500