Firms in perfectly competitive markets who wish to maximize profits ought to produce:
A. where marginal revenue equals market price.
B. as many units as their scale allows.
C. at capacity and plan to expand in the long run.
D. where total profit is the greatest.
D. where total profit is the greatest.
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When a firm practices price discrimination, for each separate set of consumers it will determine the rate of output at which
A) MR > MC. B) MR = P. C) MR = AVC. D) MR = MC.
If the demand for the Ford Mustang increases, we would expect Ford to
A) keep the price of Mustangs constant, regardless of the cost or benefit of a price change. B) increase the price of Mustangs to keep pace with the increase in demand. C) increase the price of Mustangs only if the benefit of a price increase outweighs the cost. D) decrease the price of Mustangs to maintain the increase in demand.
Which of the following must be true if good X is a normal good and income increases?
a. The demand for X will increase, and thus the price and quantity sold and bought will decrease b. The demand for X will decrease, and thus the price and quantity sold and bought will decrease. c. The demand for X will increase, and thus the price and quantity sold and bought will increase. d. The demand for X will decrease, and thus the price and quantity sold and bought will increase. e. The demand for X will increase, and thus the price and quantity sold and bought will remain the same.
Arnold is considering purchasing a business for $100,000 . It will pay him an annual return of $8,000 . If the interest rate is 10 percent, should he buy the business? What if the interest rate was 6 percent?