Marginal revenue equals marginal cost at an output of 10 units. At this output, marginal revenue equals $25, average variable cost equals $30, and average total cost equals $40. In the short run, a profit-maximizing firm will earn a profit of
A. -$150.
B. -$100.
C. $0.
D. $150.
Answer: A
You might also like to view...
When a Clarke tax is used to finance a public good, each person's tax equals
a. the amount that he is willing to pay for the good. b. the difference between the value he places on the public good and its cost. c. the cost of the public good minus the value that other people claim to receive from it. d. everyone else's tax, with the sum equaling the cost of producing the public good.
Efforts to reduce the unemployment rate are likely, in the short run, to lead to
A. a decrease in the inflation rate. B. an increase in the inflation rate. C. no change in the inflation rate. D. have no impact on unemployment.
If consumers spend 85 cents out of every extra dollar received, the:
A. MPC is 0.85. B. MPC is 0.15. C. MPC is 6.67. D. MPS is 0.85.
The budget line shows:
A. the amount of product A that a consumer is willing to give up to obtain one more unit of product B. B. all possible combinations of two goods that can be purchased, given money income and the prices of the goods. C. the minimum amount of two goods that a consumer can purchase with a specific money income. D. all possible combinations of two goods that yield the same level of utility to the consumer.