A price-taking firm will tend to expand its output as long as price exceeds average variable cost and:
a. its marginal revenue is positive
b. its marginal revenue is greater than the market price.
c. its marginal revenue is less than the market price.
d. its marginal cost is less than the market price.
d
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Explain what post hoc fallacy means and give an example
What will be an ideal response?
As savings grow in an economy, economic growth rises
a. True b. False Indicate whether the statement is true or false
Suppose some firms exit an industry characterized by monopolistic competition. We would expect the demand curve of a firm already in the industry to:
A. Shift to the left B. Shift to the right C. Become less elastic D. Remain the same since entering firms serve other customers in the market
John is trying to decide whether to expand his business or not. If he continues his business as it is, with no expansion, there is a 50 percent chance he will earn $100,000 and a 50 percent chance he will earn $300,000. If he does expand, there is a 30 percent chance he will earn $100,000, a 30 percent chance he will earn $300,000 and a 40 percent chance he will earn $500,000. It will cost him $150,000 to expand. John expects the value of his earnings to be ________ if he expands and ________ if he does not expand.
A. $320,000; $200,000 B. $170,000; $50,000 C. $120,000; $200,000 D. $30,000; $200,000