In a monopolistically competitive market, the seller maximizes profits by
A. setting P = ATC.
B. setting price where P = MC.
C. setting MC = ATC.
D. setting price where MR = MC.
Answer: D
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The difference between the lowest price a firm would have been willing to accept and the price it actually receives from the sale of a product is called
A) marginal revenue. B) price differential. C) profit. D) producer surplus.
______ measures the percent change in the cost of a fixed consumption bundle.
A. A fixed-weight price index B. Substitution bias C. Compensating variation D. Real income
A monopoly firm can sell 150 units of output for $10 per unit. Alternatively, it can sell 151 units of output for $9.90 per unit. The marginal revenue of the 151st unit of output is
a. -$5.10. b. -$0.10. c. $2.45. d. $5.10.
The economic problem is the study of
a) consumption decisions. b) production technology. c) how society decides what, how and for whom to produce. d) the best way to run society.