A profit-maximizing monopolistically competitive firm will expand output to the point where:
A. total revenue equals total cost.
B. marginal revenue equals marginal cost.
C. price equals average total cost.
D. price equals marginal cost.
Answer: B
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Assuming no change in the effective tax rate on capital, an increase in the government budget deficit will reduce the current account deficit if and only if the increase in the budget deficit
A) reduces desired national saving. B) increases desired national saving. C) reduces desired national investment. D) increases desired national investment.
When purchases of tennis socks decline following an increase in the price of tennis sneakers (other things remaining equal), the relationship between these two items can be described as
A) substitutable. B) complementary. C) unique. D) ordinary.
According to the benefits principle, it is fair for people to pay taxes based on the benefits they receive from the government
a. True b. False Indicate whether the statement is true or false
Refer to the information provided in Table 14.4 below to answer the question that follows. Table 14.4B's Strategy ?Raise PriceDon't Raise Price?RaiseA's profit $6,000A's profit $20,000?PriceB's profit $6,000B's profit $30,000A's Strategy????Don'tA's profit $30,000A's profit $10,000?RaiseB's profit $20,000B's profit $10,000Refer to Table 14.4. If both firms follow a maximin strategy, the equilibrium in the game is
A. (Don't Raise Price, Don't Raise Price). B. (Don't Raise Price, Raise Price). C. (Raise Price, Raise Price). D. (Raise Price, Don't Raise Price).