Profit maximization occurs where
A. each factor is used up to the point where its marginal physical product is equal to its marginal factor cost.
B. each factor is used up to the point where its marginal revenue product is equal to its marginal factor cost.
C. average variable cost equals average total cost.
D. average variable cost equals marginal cost.
Answer: B
You might also like to view...
The supply of a resource, such as oil, is likely to be
a. equally elastic in both the short and long run. b. more elastic in the long run than in the short run. c. more elastic in the short run than in the long run. d. determined by the demand for the resource.
If resources are better suited toward the production of one good than toward another good, then the PPF for those two goods is
A) a straight line. B) bowed outward. C) upward sloping. D) any of the above
Output regulation for a natural monopolist
A. May jeopardize equity goals. B. May require large government subsidies. C. Is consistent with marginal cost pricing. D. Encourages bloated costs.
An increase in the price of water ski boats is likely to
A. decrease the demand for water skis. B. increase the demand for water skis. C. decrease the demand for water ski boats. D. increase the demand for water ski boats.