Which of the following best describes a situation of economic efficiency?
A. A firm produces to the point at which MR = AFC, with P = AVC.
B. A firm produces to the point at which P = AVC, with MR < MC.
C. A firm produces to the point at which P = ATC, with MC < MR.
D. A firm produces to the point at which MR = MC, with P = MC.
Answer: D
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a. managers b. stockholders c. bondholders d. research and development staff e. boards of directors
When a fixed exchange rate system is adopted, it results in all of the following except:
A) reduced uncertainty about exchange rate. B) decreased volatility in prices. C) increased volume of trade. D) decreased volume of trade.
Draw a graph of the monopolistic competitor in the long run in the graph below.
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A) receive more profit than a monopolist that does not price discriminate. B) receive less profit than a monopolist that does not price discriminate. C) produce the same output as a monopolist that does not price discriminate. D) produce less output than a monopolist that does not price discriminate.