In the short run, a firm will maximize profits if it increases output when marginal revenue is greater than marginal cost.
Answer the following statement true (T) or false (F)
True
If an extra unit brings in more revenue than it costs to produce, it is adding to total profit. Hence a competitive firm should expand the rate of production whenever price or MR exceeds MC.
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During the expansion phase of the business cycle,
A) employment decreases. B) income decreases. C) unemployment increases. D) production increases.
Answer the following statement(s) true (T) or false (F)
1. In a perfect competition, profits continue indefinitely. 2. Patents allow firms to price their products below marginal costs. 3. The equilibrium price is the same whether a firm has a monopoly or is engaged in perfect competition. 4. Monopolists stop producing when price exceeds marginal cost. 5. Monopoly profits are inefficient.
If the inflation rate turns out to be less than was expected to be, the clear losers are
A. businesses. B. lenders. C. people on incomes adjusted by a COLA. D. borrowers.
Long-run market supply curves are upward sloping if
A) firms are identical. B) the number of firms is restricted in the long run. C) input prices fall as the industry expands. D) All of the above.