According to your textbook, which procedure is the general rule to follow in order to maximize net revenue?
A) Always choose a 25 percent markup if demand is inelastic.
B) Always choose a 25 percent markup if demand is elastic.
C) Always choose a markup between 50 and 100 percent (inclusively) if demand in inelastic.
D) Always choose no more than a 10 percent markup if demand is perfectly elastic.
E) None of the above.
E
You might also like to view...
In an increasing-cost industry, the entry of new firms
a. decreases equilibrium price b. increases average cost at each level of output c. shifts the industry demand curve to the left d. increases economic profits in the industry e. shifts the long-run industry supply curve to the right
Total cost of production is the sum of total variable cost and total fixed cost. If the total fixed cost alone decreases:
A. the average total cost curve shifts upward at all output levels. B. the marginal cost curve shifts downward at all output levels. C. the vertical distance between the average total cost curve and the average variable cost curve decreases at all output levels. D. the average variable cost curve shifts downward at all output levels.
Firms in imperfectly competitive industries are price takers.
Answer the following statement true (T) or false (F)
If a perfectly competitive firm's marginal revenue is greater than its marginal cost, as it increases its output, its profit ________ and the price it can charge for its product ________
A) increases; does not change B) decreases; falls C) increases; falls D) decreases; rises E) decreases; does not change