In order to maximize profits in the short run, a firm should produce where
a. marginal revenue exceeds marginal cost by the greatest amount.
b. marginal cost is minimized.
c. average total cost is minimized.
d. marginal cost equals marginal revenue.
d
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The above figure represents a restaurant operating in monopolistic competition
a. What is the profit-maximizing level of output? b. What price will the firm charge? c. What is the firm's profit (or loss)? d. Is this a long-run equilibrium? Why or why not? e. Is this firm producing its efficient scale of output?
A perfect price discriminating equilibrium maximizes
A) consumer surplus. B) the associated deadweight loss. C) the market inefficiency. D) total welfare.
If water is essential for life, while diamonds are not, then why is water cheaper than diamonds?
a. Because most people would rather die with a big diamond ring than live without one. b. Because the total utility generated by diamonds is larger than the total utility generated by water. c. Because most people do not understand their total need for water. d. Because water is abundant, the marginal utility of water is low, and price reflects marginal utility, not total utility.
A . Explain how public debt can crowd out private investment. b. Even if the crowding out effect does occur, explain the argument that crowding out does not necessarily undermine overall economic growth