A monopolistically competitive firm in the short run is producing where price is $3.00 and marginal cost is $1.50. To maximize profits:
A. the firm should increase output and decrease price.
B. the firm should decrease output and increase price.
C. the firm should produce the level of output where marginal revenue equals marginal cost.
D. the firm should continue to produce this quantity.
Answer: C
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Tom spends all his income on comics and cola and maximizes his total utility. If the price of a comic is $4 and the price of a can of cola is $1, then the ratio of the ________ is 4
A) marginal utility from cola to the marginal utility from comics B) marginal utility from comics to the marginal utility from cola C) number of comics Tom buys to the number of cola Tom buys D) total utility from comics to the total utility from cola
Which of the following is classified as an asset for a commercial bank customer?
A) A car loan B) A commercial loan C) Demand deposits D) Deposits with the Federal Reserve
Joe owns a small coffee shop, and his production function is q = 3KL where q is total output in cups per hour, K is the number of coffee machines (capital), and L is the number of employees hired per hour (labor)
If Joe's capital is currently fixed at K=3 machines, what is his short-run production function? A) q = 3L B) q = 3L2 C) q = 9L D) q = 3K2
Which of the following would not be considered a role of the government?
a. promoting competition b. providing public goods c. providing externalities d. regulating natural monopolies e. safeguarding private property and enforcing contracts