Suppose that ABC Industries, a perfectly competitive firm, currently produces 500 units of imitation ham spread for a total cost of $1,500 . The marginal cost of the 500th unit is $20, and the marginal revenue of the 500th unit is $15 . To maximize profits, Cheapo Industries should:
a. continue to produce 500 units.
b. produce more than 500 units but less than 1500 units.
c. produce less than 500 units.
d. produce more than 1500 units.
e. stop producing at 500 units.
c
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According to the article, the best description of Canada's position in the business cycle is
A) at a peak. B) at a trough. C) in an expansion. D) in a recession.
Refer to Figure 4-5. What is the area that represents the portion of producer surplus transferred to consumers as a result of the rent ceiling?
A) D + E B) D C) D + F D) F
As part of the "exchange rate effect of monetary policy," a lower money supply causes a __________ interest rate and thus __________ of the domestic currency
A) higher; appreciation B) higher; depreciation C) lower; appreciation D) lower; depreciation
Assume Robbie's Robots operates in a perfectly competitive market producing 3,000 robots per day. At this output level, the selling price is $800 per robot and the marginal cost is $625 per robot. To maximize profits, Robbie's Robots should
A. make no adjustments as they are already maximizing their profits. B. increase their output. C. decrease their output. D. stop producing since it is earning a loss.