The above figure shows the situation of a monopolistic competitor in the short run. To maximize profits, the firm should produce
A. 12,000 units.
B. 10,000 units.
C. 13,000 unit.
D. somewhere between 10,000 and 12,000 units.
Answer: B
You might also like to view...
A command-and-control approach to environmental policy
a. requires that the least amount of resources be used to achieve an objective b. uses incentives to encourage pollution reduction c. uses limits or restrictions to directly regulate polluters d. is rarely used by governments in the United States and other nations
Deadweight loss and market failure are created when a market produces
A) either more or less than the efficient quantity. B) more than the efficient quantity but not when less than the efficient quantity is produced. C) less than the efficient quantity but not when more than the efficient quantity is produced. D) the efficient quantity. E) None of the above answers is correct because deadweight loss has nothing to do with the efficient quantity.
In Figure 3-3 above, when income is 1,500, unplanned inventory investment is
A) 200. B) 300. C) 500. D) -200. E) -500.
Imposition of an output tax on all firms in a competitive industry will result in
A) a downward shift in each firm's marginal cost curve. B) a downward shift in each firm's average cost curve. C) a leftward shift in the market supply curve. D) the entry of new firms into the industry. E) higher profits for the industry as price rises.