If a profit-maximizing firm is currently producing where MR = MC, it should
A. decrease output so that marginal revenue will be greater than marginal cost and the firm's profit will increase.
B. exit the industry.
C. not change because it is already maximizing profit.
D. increase output so that marginal revenue is less than marginal cost.
Answer: C
You might also like to view...
An adverse supply shock causes the short-run aggregate supply curve to shift left, increasing the price level
Indicate whether the statement is true or false
When a firm faces a perfectly competitive market and buys its inputs from perfectly competitive markets, the only choice the firm has to affect its profits is to:
A. increase its selling price. B. change the quantity it produces. C. decrease its cost of production lower than other firms. D. decrease the selling price.
Most people living in Country Y have no more than a ninth-grade education. In contrast, about half of the adult population of Country Z has a college degree. Based on this information, which statement about these two countries is most likely true?
a. Country Z does not have many natural resources available. b. Country Y has a higher rate of economic growth than Country Z. c. There are more people living in Country Y than in Country Z. d. The per capita output of Country Z is higher than that of Country Y.
The natural rate hypothesis involves how the economy will settle into ______.
a. a rate of aggregate demand b. a rate of unemployment c. an interest rate d. an inflation rate