In the short run, a profit-maximizing firm's decision to produce should be guided by whether
A) it makes a profit.
B) its marginal profit is maximized.
C) its total revenue exceeds its fixed cost.
D) its total revenue covers its variable cost.
Answer: D
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Refer to the above table. You are given information on Jasmin's consumption for 2005 and 2015. Using 2005 as the base year, compute the price index for 2015. The index equals
A) 1.5. B) 70.588. C) 141.667. D) 107.143.
A perfectly competitive firm sells its output for $100 per unit and marginal cost is $100 per unit. To maximize short-run profit, the firm should:
a. increase output. b. decrease output. c. maintain its current output. d. shut down.
If the demand in a perfectly competitive market decreases, the price will:
A. temporarily increase. B. increase permanently. C. temporarily decrease. D. decrease permanently.
Write down your understanding and interpretation for each of the following equations, then make sure that you familiarize yourself with these formulas: Leakages = Injections in Equilibrium (i.e. SP + (T – TR) + M = I + G + X)
What will be an ideal response?