Suppose you are deciding whether or not to increase production. You are currently making a profit. If you produce one more unit, your increase in cost will be $10, your average variable costs will increase to less than that, and your average fixed costs will decrease. Finally, your average revenue will increase to $10, but your increase in revenue will be $10. You should
A. increase production by exactly 1 unit.
B. increase production by at least 1 unit.
C. leave production unchanged because profit is maximized where you are.
D. redo the math associated with decreasing production because that may result in greater profit.
Answer: C
You might also like to view...
The Fed buys securities and gives the bank a check for the amount. After the check has cleared,
A) reserves remain unchanged because the increase of reserves at the bank are offset by an increase in reserves at the Fed. B) reserves have decreased by the amount of the check because the Fed pays for the check by decreasing the bank's deposits at the Fed. C) reserves have increased by the amount of the check because the Fed pays for the check by increasing the amount of the bank's deposits with the Fed. D) reserves have increased by the amount of the reserves multiplied by the required reserve ratio, and the quantity of money increases by the difference between the amount of the check and the increase in the reserves.
Cheap labor is the source of comparative advantages
a. True b. False Indicate whether the statement is true or false
Facebook is a social network that is subject to network externalities.
a. true b. false
What is the purpose of a pollution tax?
What will be an ideal response?