If price is $5, marginal cost is $5, average total cost is $3, and the quantity produced is 150 units, then the perfectly competitive firm is
A) not maximizing economic profit.
B) earning $2 in economic profits and is maximizing economic profits.
C) earning $150 in economic profits and is not maximizing economic profits.
D) earning $300 in economic profits and is maximizing economic profits.
Answer: D
You might also like to view...
Iran called on OPEC in November 2008 to cut production by a further 1 million to 1.5 million barrels per day when it meets in Cairo later this month. Why would OPEC, a cartel, restrict production?
A) to decrease demand B) to increase supply C) to decrease quantity supplied D) to increase profits
How does one determine whether demand is elastic, inelastic, or unit elastic?
What will be an ideal response?
When evaluating the taxation of dividends in isolation, it is easy to overlook the double taxation of saving
a. True b. False
An approach that can be taken by someone directly involved in a transaction to solve the problems caused by information asymmetry is:
A. statistical discrimination. B. mandating that information be shared. C. proofing. D. All of these are ways to solve information asymmetry.