A profit-maximizing firm should keep expanding production so long as marginal cost exceeds marginal revenue
a. True
b. False
Indicate whether the statement is true or false
False
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Within a monopolistically competitive industry
A) firms can freely enter and exit and economic profits are zero in the long run. B) firms can freely enter and exit and economic profits are greater than zero in the long run. C) there are some barriers to entry and exit and economic profits are zero in the long run. D) there are some barriers to entry and exit and economic profits are greater than zero in the long run.
If the marginal social benefit of a good equals the marginal private benefit of the good, then the marginal external benefit of the good
A) is zero. B) equals the marginal social benefit. C) equals the marginal social cost. D) equals the marginal private cost.
The above table shows marginal costs and marginal benefits of clean air in a particular industrial area. In the table, when the quantity of clean air is at 75 percent
A) the quantity of polluted air is 75 percent. B) the marginal benefit of clean air exceeds the marginal cost. C) the marginal benefit of clean air is less than the marginal cost. D) the quantity of clean air is optimal.
For a nondiscriminating monopolist, describe the relationship between market price (P), average revenue (AR), and marginal revenue (MR)
a. P = AR = MR b. P > AR = MR c. P = AR > MR d. P > AR > MR e. P = AR < MR