In a free market, a given unit of an input will be used by the firm that
A. earns the largest addition to total profit from the use of that unit of input.
B. has the lowest marginal cost of producing another unit of output.
C. sells its output for the highest price.
D. earns the largest total profit.
Answer: A
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Very Technical is a firm that sells computing equipment. It costs Very Technical $150 for each order of computer monitors and the variable cost of placing an order is $10 per monitor. If Very Technical sells 5,000 computer monitors a year and they order 250 monitors, what is the annual ordering cost of the monitors?
A) $110,000 B) $67,000 C) $85,250 D) $53,000
With perfect price discrimination, the firm faces a constant marginal revenue
a. True b. False
Markets for pollution rights:
a. have never been tried in the United States. b. assign property rights to those who value them least. c. allow the government to assign property rights. d. enable those who value them most to pollute.
The basic forces driving the "invisible hand" are
a. government and business. b. information and computer technology. c. competition and self-interest. d. cooperation and altruism.