Consider the perfectly competitive firm in the above figure. At the profit maximizing level of output, the firm is
A) incurring an economic loss equal to $119.00.
B) incurring an economic loss equal to $123.50.
C) incurring an economic loss equal to $187.00.
D) making zero economic profit.
A
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Increases in consumer wealth will cause an increase in autonomous consumption
Indicate whether the statement is true or false
When a unit tax of $2 is levied on a product
A) the entire $2 is paid by the consumer. B) the entire $2 is paid by the producer. C) both the consumer and producer pay $2 each. D) the consumer pays part of the $2 and the producer pays the rest.
The interest-rate-based transmission mechanism assumes that the Fed can stimulate investment by
A) selling bonds. B) buying bonds. C) raising the discount rate relative to the federal funds rate. D) raising the required reserve ratio.
Studies of NAFTA have concluded that increases in the variety of U.S. imports from Mexico are equivalent to about a ________ per year reduction in Mexican import prices.
a. 100.2% b. 10.2% c. 1.2% d. 0.2%