If a perfectly competitive firm is producing 200 units and, at the 200th unit, the difference between marginal revenue and marginal cost (MR - MC) is positive, which of the following is true?
A) The firm should decrease production to maximize profit.
B) The firm should increase production to maximize profit.
C) The 200th unit costs more to produce than the firm earns in revenue.
D) The firm is maximizing profit.
B) The firm should increase production to maximize profit.
You might also like to view...
Savings in our model are
A) durable consumption. B) non-durable consumption. C) postponed consumption. D) money.
With cheaper communication technology and easy flow of information between countries,
a. industrial production becomes more labor intensive. b. the pattern of employment and production can change. c. the digital divide widens. d. transaction costs increase.
How does a change in the price level influence the AE curve and the AD curve?
What will be an ideal response?
Suppose an individual firm is comparing two investments, a one year bond from a U.S. firm paying 4% or a one year bond from a German firm which is paying 6%. The current dollars-per-euro rate is 0.75, and the expected rate in one year is 0.78
If the expected rate is correct, which investment will yields a covered interest arbitrage opportunity? A) The U.S. Bond B) The German Bond C) They will have the same return D) This cannot be determined from the information given.