Assume Cathy's Cupcake Company operates in a perfectly competitive market producing 10,000 cupcakes per day. At this output level, marginal cost exceeds this firm?s price. Assuming price exceeds average variable cost, to maximize profits Cathy's should
A. decrease their output.
B. stop producing since it is earning a loss.
C. increase their output.
D. make no adjustments as they are already maximizing their profits.
Answer: A
You might also like to view...
Deficient information on unsafe products can cause:
a. overconsumption of a product. b. waste of resources used to produce a product. c. consumers to pay a higher price for a product. d. all of the above answers are true. e. none of the above answers a. - c. are true.
Supply-side tax cuts are more likely to have the intended beneficial effect on
A. budget deficits. B. consumer spending. C. investment spending. D. net exports.
An increase in nominal U.S. GDP necessarily implies that the United States is producing a larger output of goods and services
a. True b. False Indicate whether the statement is true or false
Under what circumstances would a consumer who has an anchoring bias still be likely to maximize her marginal utility?
a. if the anchor price is above the price the seller really wants b. if the anchor price is the main reference the buyer uses in negotiating c. if the anchor price is above the legitimate market price d. if the anchor price equals the legitimate market price