A consulting company estimated market demand and supply in a perfectly competitive industry and obtained the following results:Qd = 25,000 ? 5,000P + 25MQs = 240,000 + 5,000P ? 2,000PIwhere P is price, M is income, and PI is the price of a key input. The forecasts for the next year are 
= $15,000 and 
I = $20. Average variable cost is estimated to beAVC = 14 ? 0.008Q + 0.000002Q2Total fixed cost will be $6,000 next year. Suppose income next year is forecasted to be $10,000 instead. What is the profit-maximizing output choice for the firm?
A. zero
B. 5,548
C. 3,480
D. 2,167
E. 8,000
Answer: D
You might also like to view...
___________ is the ability to recognize and use resources effectively
a. Efficiency b. Intuition c. Helpfulness d. Resourcefulness
According to dynamic tax analysis, continually increasing the tax rate will eventually
A) cause an increase in the tax base. B) have no impact on the tax base. C) cause a decrease in the tax base. D) result in an initial decrease in the tax base followed ultimately by a rise in the tax base.
An agency that regulates product markets is the
A) Equal Employment Opportunity Commission. B) Environmental Protection Agency. C) Federal Trade Commission. D) Occupational Safety and Health Administration.
The country is experiencing rapid inflation. What could the Fed do reduce the money supply and slow inflation?
a. buy government bonds b. lower the reserve ratio c. sell government bonds d. lower the discount rate