If a perfectly competitive firm with a known demand and random marginal cost is producing at a level in which the marginal cost is less than the expected marginal cost and the marginal revenue, which of the following is true?
A) To maximize expected profit, the firm should decrease production.
B) To maximize expected profit, the firm should decrease production by one -half.
C) The firm is maximizing expected profit.
D) To maximize expected profit, the firm should increase production.
D) To maximize expected profit, the firm should increase production.
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According to a behavioral economist, people who are unwilling to sell the last pound of rice they purchased for the same price that they paid for it are displaying ________
A) the endowment effect B) bounded rationality C) bounded self-interest D) bounded will power
When using a debit card, a customer directly uses his or her checking account
a. True b. False Indicate whether the statement is true or false
Archie wants to buy a steak for dinner. When he goes by the store, he sees that the price of steak has gone up a lot since the previous week. He decides to buy hot dogs instead. The __________ means that even though Archie has the same amount of money he did last week, that money won’t buy the same amount of steak today.
a. income effect b. substitution effect c. inflationary effect d. deflationary effect
If you must determine the long-run equilibrium output of a perfectly competitive firm and you are permitted to see only one curve, which of the following curves is most helpful?
a. demand b. marginal cost c. average cost d. average fixed cost