What is always true at the quantity where a firm's average total cost equals average revenue?
A) The firm's profit is maximized. B) Marginal cost equals marginal revenue.
C) The firm breaks even. D) The firm's revenue is maximized.
C
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According to the graph shown, consumer surplus is:
A. the area under the supply curve and above the price.
B. the area above the supply curve and below the price.
C. the area under the demand curve and above the market price.
D. the area above the demand curve and below the price.
In a perfectly competitive industry we are likely to find
a. firms producing a wide variety of products b. barriers to entry c. no profit possible in the short run d. firms that do not advertise e. firms that can choose the price of their products
The change in the quantity of goods and services demanded in the U.S. is based on the logic that as the price level rises,
a. real wealth falls, interest rates rise, and net exports fall. b. real wealth falls, interest rates rise, and net exports rise. c. real wealth rises, interest rates fall, and net exports fall. d. real wealth rises, interest rates fall, and net exports rise.
If a price taker attempts to raise its price by a small amount, the quantity that its customers will buy will
A. decrease to zero. B. increase. C. remain constant. D. decrease by a small amount.