In Figure 24.2, the profit-maximizing monopolist will earn a profit per unit of
A. $5.50.
B. $1.50.
C. $4.00.
D. $4.70.
Answer: B
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State the law of diminishing marginal returns
What will be an ideal response?
Suppose Sarah owns a small company that makes wedding cakes. The accompanying table shows how Sarah's total cost varies depending on the number of wedding cakes she makes each day.Number of Cakes Per DayTotal Cost Per Day0$1001$1802$2203$3004$4005$5206$660 If the market for wedding cakes is perfectly competitive, and wedding cakes sell for $95 each, then Sarah should produce ________ cakes per day.
A. 5 B. 3 C. 6 D. 0
Assume Robbie's Robots operates in a perfectly competitive market producing 3,000 robots per day. At this output level, the selling price is $800 per robot and the marginal cost is $800 per robot. To maximize profits, Robbie's Robots should
A. make no adjustments as they are already maximizing their profits. B. increase their output. C. decrease their output. D. stop producing since it is earning a loss.
Increasing the stock of capital while holding the labor force constant will ________ output at a(n) ________ rate
A) decrease; increasing B) increase; increasing C) increase; decreasing D) decrease; decreasing