When a firm faces a downward-sloping demand curve, marginal revenue
A) must exceed price because the price effect outweighs the output effect.
B) must exceed price because the output effect outweighs the price effect.
C) is less than price because a firm must lower its price to sell more.
D) equals price because the firm sells a standardized product.
C
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If the price of grapefruit rises, the substitution effect due to the price change will cause
A) a decrease in the demand for oranges, a substitute for grapefruit. B) a decrease in the quantity of grapefruit demanded. C) a decrease in the quantity of grapefruit supplied. D) a decrease in the demand for grapefruit.
All of following are commonly considered to be common property EXCEPT
A) spotted owls in the wild. B) fish in an ocean. C) chickens raised in a farm. D) wild salmon in a river.
A profit-maximizing firm should spend an additional dollar on advertising so long as this expenditure results in more than one dollar of:
a. additional sales. b. reduced costs. c. increased profits. d. demand.
To calculate nominal GDP, you:
a. Multiply the quantity of everything consumed by the price of everything consumed, and sum the results. b. Multiply the exchange rate by the price of each good and service produced. Then sum them and divide by the domestic price index. c. Add the price of everything consumed to the quantity of everything consumed and sum the results. d. Add the quantities of everything produced to the average national price level and then multiply times one plus the inflation rate [i.e., (1 + inflation rate)]. e. Multiply the quantity of everything produced by the price of everything produced, and sum the results.