A firm is currently operating where the MC of the last unit produced = $64, and the MR of this unit = $70. What would you advise this firm to do?
A. Shut down.
B. Increase output.
C. Stay at current output.
D. Decrease output.
Answer: B
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A sustained decrease in the price level is known as deflation
a. True b. False Indicate whether the statement is true or false
International trade is beneficial to a participating country when that country has a particular product that it is able to sell at a lower price compared to other participating countries
a. True b. False Indicate whether the statement is true or false
Which of the following is not correct?
a. The producer who requires a smaller quantity of inputs to produce a good is said to have an absolute advantage in producing that good. b. The producer who gives up less of other goods to produce Good X has the smaller opportunity cost of producing Good X. c. The producer who has the smaller opportunity cost of producing a good is said to have a comparative advantage in producing that good. d. The gains from specialization and trade are based not on comparative advantage but on absolute advantage.
When a firm operates under conditions of monopoly, its price is
a. not constrained. b. constrained by marginal cost. c. constrained by demand. d. constrained only by its social agenda.