If a profit-maximizing firm finds that price exceeds average variable cost and marginal cost is greater than marginal revenue, it should:
a. reduce output, but continue producing in the short run.
b. increase output
c. shut down.
d. not alter its production level since it is earning a profit.
a
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Refer to Table 14-7. Which of the following statements is true?
A) Perfect's dominant strategy is to offer same-day delivery; Florabunda's dominant strategy is to not offer same-day delivery. B) Florabunda's dominant strategy is to offer same-day delivery; Perfect's dominant strategy is to not offer same-day delivery. C) The dominant strategy for both firms is to offer same-day delivery. D) Neither Perfect nor Florabunda have a dominant strategy.
"A perfect competitor should maximize total revenues." Do you agree or disagree? Explain
What will be an ideal response?
The bowed-out-from-the-origin shape of the production possibilities curve occurs because resources are
a. equally well-suited to production of both goods b. not being used efficiently c. not always of equal quality and some are better suited to the production of one type of good than others d. increasing as more of one good is produced e. of an increasingly inferior quality
An external cost, such as the cost generated by pollution, is
A. a cost paid by producers of the product. B. a cost paid by a third party or by society at large. C. a cost paid by consumers of the product. D. not a true opportunity cost of production.