A perfectly competitive firm should continue to expand output until
A. total revenue exceeds total costs.
B. total revenue exceeds variable costs.
C. marginal revenue equals marginal costs.
D. average revenue equals variable costs.
Answer: C
You might also like to view...
What does a vertical Phillips curve in the long run imply? a. In the long run, the rate of unemployment will converge toward zero. b. Higher inflation does not permanently reduce the rate of unemployment. c. Higher inflation increases the rate of unemployment
d. Higher inflation lowers the rate of unemployment.
A price-taking firm's variable cost function is C = Q3, where Q is the output per week. It has an avoidable fixed cost of $2,000 per week. Its marginal cost is MC = 3Q2. What is the profit maximizing output if the price is P = $192?
A. 0 B. 6 C. 8 D. 10
When the government levies a $100 million tax on people's income and puts the $100 million back into the economy in the form of a spending program such as new interstate highway construction, the
a. tax multiplier magnifies the effect of taxes on the level of national income b. tax, then, generates a $100 million decline in national income c. level of national income expands by $100 million d. effect on national income is uncertain e. tax multiplier overpowers the income multiplier, triggering a rollback in national income
Many _________ businesses raise _________ of their capital through debt.
a. small; most b. small; none c. large; most d. large; none