If price is greater than marginal cost, a perfectly competitive firm should increase output because
A. The price it receives for its product is increasing.
B. Marginal costs are increasing.
C. Additional units of output will add to the firm's profits (or reduce losses).
D. Total revenues would increase.
Answer: C
You might also like to view...
The two biggest items of the U.S. federal government revenue that together account for over approximately 80 percent of total federal government revenue are
A) personal income taxes and Social Security taxes. B) personal income taxes and corporate income taxes. C) personal income taxes and sales taxes. D) corporate income taxes and Social Security taxes. E) corporate income taxes and property taxes.
The real wage rate will fall if the
A) labor supply curve shifts rightward and the labor demand curve does not shift. B) labor supply curve shifts leftward and the labor demand curve does not shift. C) labor demand curve shifts rightward and the labor supply curve does not shift. D) labor demand curve shifts rightward more than the labor supply curve shifts rightward.
If a mutual fund outperforms the market in one period, evidence suggests that this fund is
A) highly likely to consistently outperform the market in subsequent periods due to its superior investment strategy. B) likely to under-perform the market in subsequent periods to average its overall returns. C) not likely to consistently outperform the market in subsequent periods. D) not likely to outperform the market in any subsequent period.
One of the most responsive components of investment to changes in interest rates are
a. equipment. b. inventories. c. automobile purchases. d. residential housing. e. none of the above.