In the above figure, if the firm increases its output from Q2 to Q3, it will
A) reduce its marginal revenue.
B) increase its marginal revenue.
C) decrease its profit.
D) increase its profit.
C
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The more profit a monopolist makes, the more inefficient is the monopoly outcome.
Answer the following statement true (T) or false (F)
One way to overcome the problem of the commons is to
A) assign property rights so that someone owns the resource. B) take away property rights so that no one owns the resource. C) leave the market alone because the market will reach an equilibrium in which the efficient amount of the resource is used. D) None of the above answers is correct.
Average fixed costs
A) are always rising with increases in production B) are dependent on marginal costs. C) are dependent on average variable costs. D) are always falling with increases in production.
If the interest rate on saving is 5 percent per period, then the true opportunity cost of being paid $100 next period instead of this period is
a. $5. b. $105. c. less than $5 if people suffer from a "defective telescopic faculty." d. more than $5 if people suffer from a "defective telescopic faculty."