A monopolistically competitive firm can minimize its losses by producing where ________ as long as ________.
A. P = ATC; P > MR
B. MR = MC; P > AVC
C. P = MC; P > ATC
D. P = MR; P > AFC
Answer: B
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Consider the following data for a closed economy:
Y = $12 trillion C = $8 trillion I= $2 trillion G = $2 trillion TR = $2 trillion T = $3 trillion
The mayor of Newton is considering proposals to deal with an unsafe intersection. She could install a traffic light at a cost of $50,000 or she could install stop signs at a cost of $5,000 . The traffic light is expected to reduce the risk of fatality
by 0.45 percent and the stop signs are expected to reduce the risk of fatality by 0.054 percent. If the value of human life is estimated to be $10 million, what choice should the mayor make? Briefly explain.
Suppose people anticipate inflation will be 3 percent during the next several years. If this is true, when the real interest rate is 4 percent, what will be the nominal (money) interest rate?
What will be an ideal response?
The table given below reports the sales value at each stage of production of the soft drink, Pepsi. Table 5.3 Production Stage Sales Value Sugar cane $0.05 Processed sugar $0.10 Wholesale Pepsi $0.40 Pepsi in a vending machine $0.60 Refer to Table 5.3. If Pepsi was the only good produced in the economy, then what would be the value of GDP, according to the expenditures approach?
A) $1.05 B) $0.05 C) $0.20 D) $0.60 E) $0.40