What is the profit-maximizing rule for a monopolistically competitive firm?
A) to produce a quantity that maximizes market share
B) to produce a quantity that maximizes total revenue
C) to produce a quantity such that marginal revenue equals marginal cost
D) to produce a quantity such that price equals marginal cost
Answer: C
You might also like to view...
Barriers to entry reduce the likelihood that price-setter firms will see their positive economic profits competed away over time
Indicate whether the statement is true or false
Figure 15-1 above displays the consumption pattern over the lifetime of an individual. Saving and asset accumulation occur during the years ________ according to ________ theory of consumption
A) R to L; Keynes' B) R to L; Modigliani's C) O to R; Friedman's D) O to R; Modigliani's
If a consumer is choosing the optimal combinations of two goods X and Y, and then the price of good Y decreases, this causes:
a. MU/P of good X to increase, so the consumer now must buy more X to find a new optimal combination. b. demand for good X to increase. c. MU/P of good Y to increase, so the consumer now must buy more Y to find a new optimal combination. d. MU/P of good Y to decrease, so the consumer now must buy more Y to find a new optimal combination. e. the demand for good X and good Y will not change.
Productivity increases, brought about by increased education and training, may shift the aggregate supply curve outward
a. True b. False Indicate whether the statement is true or false