What is the value of marginal profit at the profit-maximizing output?
Marginal profit is the difference between marginal revenue and marginal cost. When a firm maximizes profit, the last unit of output adds equal amounts to revenue and cost. Therefore, at the profit-maximizing output marginal profit is zero.
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Refer to the scenario above. Suppose you decide to buy a Toyota Corolla. You value the car for $10,000. You don't know it, but the car dealer values it for $8,500. Which of the following is true in this case?
A) There are no gains from trade. B) There are gains from trade. C) There are negative economies of scale. D) There are positive economies of scale.
Hedge funds often buy the same stocks and track each other's investment strategies. This is an example of ________
A) herding B) anchoring C) hedging D) sniping
Which of the following is a possible explanation for the shift of the production possibilities curve illustrated?
a. an increase in the number of idle factories b. a technological advance that affects only bicycle production c. a technological advance that affects both pizza and bicycle production d. a decrease in the quantity of labor available due to emigration
Regulations are sometimes used to "correct" the failures of a market mechanism
a. True b. False Indicate whether the statement is true or false