A perfectly competitive firm finds that: Average total cost is $25; Average variable cost is $15; Marginal cost is $20 and increasing; Price of the product is $22. This firm should
a. produce more output
b. raise the price of its product
c. reduce production without shutting down
d. shut down (reduce output to zero)
e. do nothing (it is currently maximizing profit)
A
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The wage earned by a domestic resident for working in a foreign company for a month is an example of a(n) ________
A) factor payment from foreigners B) transfer payment from foreigners C) export by the domestic resident D) import by the domestic resident
According to the data in the table, the inflation rate for 1996 was
Consider the following data from the Economic Report of the President.
a) 10.22 %
b) 2.28 %
c) 2.46 %
d) 1.1022 %
e) 11.022 %
The required reserve ratio is the
A) amount of excess reserves the bank holds just in case. B) total amount of reserves the bank holds in its vaults. C) total amount of reserves the bank holds at the Fed. D) amount of reserves banks are required by the Fed to be held as a percentage of the bank's deposits. E) amount of reserves banks are required by the Fed to be held as a percentage of the bank's loans.
One of the assumptions of monopolistic competition is that firms produce differentiated products. What does this assumption imply about the demand curve facing a representative firm?
What will be an ideal response?