You are the manager of a firm that sells its product in a competitive market at a price of $48. Your firm's cost function is C = 60 + 2Q2. Your firm's maximum profits are:
A. $348.
B. $192.
C. $576.
D. $228.
Answer: D
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Which of the following is likely to happen if there is an increase in entrepreneurial activity in an economy?
A) The productivity of the economy will increase. B) The inflation rate in the economy will decrease. C) The exchange value of its currency in the foreign exchange market will increase. D) The income per capita of the economy will fall.
If marginal cost is rising in a competitive firm's short-run production process and its average variable cost is falling as output is increased, then which statement is true?
a. Marginal cost is above average variable cost. b. Marginal cost is below average fixed cost. c. Marginal cost is below average variable cost. d. Average fixed cost is constant.
When the price of coffee is $2.2 per cup, 11 million cups are demanded, and when the price of coffee goes up to $2.6 per cup, 10 billion cups are demanded. The coffee in this range has a(n)
A. elastic demand. B. unit elastic demand. C. perfectly elastic demand. D. inelastic demand.
Since most banks have positive gaps and negative duration gaps, an increase in market interest rates will
A) increase bank profits and increase bank capital. B) increase bank profits and decrease bank capital. C) decrease bank profits and increase bank capital. D) decrease bank profits and decrease bank capital.