If a firm is producing where MR < MC
A. the firm is already maximizing profits because revenue is being decreased by more than costs.
B. the revenue gained by producing one more unit of output equals the cost incurred by doing so.
C. the revenue gained by producing one more unit of output is less than the cost incurred by doing so.
D. the revenue gained by producing one more unit of output exceeds the cost incurred by doing so.
Answer: C
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Suppose that you consume only pizza, which costs $4 per slice, and Diet Pepsi, which costs $2 each. The table above gives your utility from consuming these two goods
If your income is $14, which of the following consumption combinations will you choose? A) 3 slices of pizza and 1 Diet Pepsi B) 2 slices of pizza and 3 Diet Pepsis C) 1 slice of pizza and 5 Diet Pepsis D) 0 slices of pizza and 7 Diet Pepsis
Which of the following is a relevant cost?
A) replacement cost B) sunk cost C) historical cost D) fixed cost E) All of the above are relevant.
Other things equal, granting unemployment benefits or welfare benefits to striking workers
A) reduces the likelihood of a strike since management will be more cooperative. B) reduces the costs of a strike to workers and will increase their willingness to strike. C) reduces the likelihood of a strike since union workers make wages significantly above unemployment benefits or welfare payments. D) increases the willingness of management to permit a strike.
When the price of good A is $50, the quantity demanded of good A is 500 units. When the price of good A rises to $70, the quantity demanded of good A falls to 400 units. Using the midpoint method, the price elasticity of demand for good A is
a. 1.50, and an increase in price will result in an increase in total revenue for good A. b. 1.50, and an increase in price will result in a decrease in total revenue for good A. c. 0.67, and an increase in price will result in an increase in total revenue for good A. d. 0.67, and an increase in price will result in a decrease in total revenue for good A.