If a firm that produces an information product uses marginal cost pricing, then the firm
A. will earn positive profits but could earn a higher profit by using a different method.
B. will maximize profits.
C. will earn profits equal to zero.
D. will earn negative profits.
Answer: D
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Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
Goods that have been produced but not yet sold are referred to as
A) capital goods. B) inventories. C) understocks. D) pre-sold goods.
Average total cost is equal to
a. output/total cost. b. total cost - total quantity of output. c. average variable cost + total fixed cost. d. total cost/output.
One of the most, if not the most, severe recessions since World War II began in the
A. fall of 2005. B. fall of 2007. C. summer of 1964. D. summer of 1927.