If a firm is producing where MR > MC
A. the firm is already maximizing profits because revenue is being increased by more than costs.
B. the revenue gained by producing one more unit of output equals the cost incurred by doing so.
C. the revenue gained by producing one more unit of output is less than the cost incurred by doing so.
D. the revenue gained by producing one more unit of output exceeds the cost incurred by doing so.
Answer: D
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If a firm goes out of business because of negative economic profits, its books
A) might indicate a positive accounting profit. B) might indicate that opportunity costs were zero. C) might indicate that taxes are too high. D) might suggest a mistaken value of explicit costs.
Nominal GDP is calculated by using
A. prices set in a base year. B. average prices in all major cities. C. current prices. D. prices charged by initial producers.
If potential output for an economy equals $8 billion and actual output equals $7 billion, then this economy's output gap should be expressed as:
A. $1 billion. B. ?12.5 percent. C. 12.5 percent. D. ?$1 billion.
The government regulates food additives
A. To restrain the market power of food producers. B. To prevent externalities. C. To keep food producers from dominating their markets. D. To assess their safety.