A perfectly competitive firm charges the market price of $18 to sell its product. The firm produces and sells the profit-maximizing quantity of 50 units at this price. Its average total cost is $17 and its average variable cost is $15. Which of the following statements is then true?
a. This firm should shut down now.
b. At this current level of production, the firm's marginal cost is $17.
c. At this current level of production, the firm's marginal cost is $15.
d. The firm is earning an economic profit of $50
Ans: d. The firm is earning an economic profit of $50
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Is increased capital spending the only way for an economy to expand its production possibilities frontier?
A. No, an economy can also expand by invention and innovation. B. No, an economy can also grow by investment instead of capital spending. C. Yes, more capital is the only way to expand its production possibilities frontier. D. Yes, although more capital clearly has a high opportunity cost. E. Yes, because capital is the only constraining resource that limits growth.
If the real interest rate is lower than the equilibrium real interest rate:
A) the quantity of credit demanded equals the quantity of credit supplied. B) the quantity of credit demanded falls short of the quantity of credit supplied. C) the quantity of credit supplied falls short of the quantity of credit demanded. D) interest rates tend to fall further.
Refer to the table below. If Stuffed Pies is currently producing 7 units of quality, to maximize profit, Stuffed Pies should ________ the units of quality.
Stuffed Pies is a frozen calzone manufacturer. The table above summarizes Stuffed Pies' marginal revenue and marginal cost of quality at various quality amounts.
A) not change
B) decrease by 50 percent
C) increase
D) decrease
Production cannot occur without
a. saving b. government c. a market system d. low interest rates e. high interest rates