Pulsar Plc is considering of exporting its products to the Swedish market. It expects to earn an annual accounting profit of 200m from doing so. It has also the option to begin exporting to India, Brasil or South Africa, but it has the production capacity for only one of the four possible markets (including Sweden). The expected annual accounting profit for the above three markets is 250m, 200m, and 150m respectively. On the basis of this information, the economic profit of exporting to Sweden is equal to:

-50m.

0m.

50m.

200m.

If the marginal cost is above the average cost at a certain level of production and the firm decides to increase output, then:

The average cost will increase but the marginal cost will decrease.

Both the average and the marginal cost will increase.

The average cost will increase but the average cost will decrease.

Both the average and the marginal cost will decrease.

Which one of the following conditions you would least expect in a supply-driven market?

Highly standardized products.

Massive market size.

Big corporate customers.

Fast technological change.