The goal of the manager of a firm is sales maximization. The firm will produce
a. the output level at which MR = 0.
b. as much output as it can.
c. the same output that it would if the goal was profit maximization.
d. the same output that it would if the goal was cost minimization.
a
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Define the following terms and explain their importance to the study of economics. a. public good b. externality c. irreversible decision d. moral hazard e. rent seeking
What will be an ideal response?
Explain why foreign trade imbalances do not always create problems
A market consequence of a price floor is that the price consumers pay with the floor when compared to the price they paid without the floor,
a. falls so that there is an excess supply b. falls so that there is an excess demand c. increases so that there is an excess supply d. increases so that there is an excess demand e. falls so that the new equilibrium price is lower than the old
If there is a shortage of product X, and the price is free to change:
A. fewer resources will be allocated to the production of this good. B. the price of the product will rise. C. the price of the product will decline. D. the supply curve will shift to the left and the demand curve to the right, eliminating the shortage.