Economic profits and losses:.
a. have no influence on the composition of domestic output.
b. are both considered by economists to be a part of production costs.
c. are essential to the reallocation of resources from less desired to more desired goods.
d. equalize the distribution of income in the long run.

Based on the supply and demand theory, why do medical doctors earn higher wages than child-care workers?

You are the owner of a local honda dealership. unlike other dealerships in the area, you take pride in your “no haggle” sales policy. last year, your dealership earned record profits of $1.5 million. however, according to the local chamber of commerce, your earnings were 10 percent less than either of your competitors. in your market, the price elasticity of demand for midsized honda automobiles is 4.5. in each of the last five years, your dealership has sold more midsized automobiles than any other honda dealership in the nation. this entitled your dealership to an additional 30 percent off the manufacturer’s suggested retail price (msrp) in each year. taking this into account, your marginal cost of a midsized automobile is $11,000. what price should you charge for a midsized automobile if you expect to maintain your record sales?

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