In order to maximize profits, a firm that can sell all it wants without affecting price should produce
a. where average variable costs are minimized.
b. where marginal cost is equal to average variable costs.
c. where marginal cost is equal to price.
d. where marginal cost is a minimum.
c
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The cost of education, professional athletes’ pay, and medical services rise faster than the rate of goods and services because their average productivity has remained the same.
Answer the following statement true (T) or false (F)
Using the data in the table above, the equilibrium quantity and equilibrium price for a stapler is
A) 10,000 and $8. B) 90,000 and $8. C) 100,000 and $5. D) 70,000 and $6. E) 60,000 and $5.
An increase in the discount rate will result in:
A) increase in bank reserves and a decrease in the federal funds rate. B) increase in bank reserves and an increase in the federal funds rate. C) decrease in bank reserves and a decrease in the federal funds rate. D) decrease in bank reserves and an increase in the federal funds rate.
Suppose the company that owns the vending machines on your campus has doubled the price of a can of soda. They then notice that they are selling approximately 15 percent fewer sodas. The price elasticity of demand for sodas from the campus vending machines, therefore, is:
A. unit elastic. B. inelastic. C. elastic. D. infinite.