As long as price is greater than average variable cost, a firm maximizes its profit by producing that quantity of output for which
a. average revenue equals average total cost
b. the price is the highest
c. marginal revenue equals marginal cost
d. average total cost is minimized
e. average variable cost is minimized
C
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Most economists believe that changes in the price level have
A) no effect on the quantity of output supplied in either the short run or the long run. B) an effect on the quantity of output supplied in the short run, but not in the long run. C) an effect on the quantity of output supplied in the long run, but not in the short run. D) an effect on the quantity of output supplied in both the short run and the long run.
Post 9/11, air travel industry in the U.S. economy saw an increase in demand, which led to a sharp rise in employment opportunities
Indicate whether the statement is true or false
A perfectly competitive firm's supply curve is the portion of its ________ cost curve that lies above its ________ cost curve.
A. average total; marginal B. marginal; average total C. marginal; average variable D. average variable; marginal
A producer is hiring 20 units of labor and 6 units of capital (bundle A). The price of labor is $10, the price of capital is $2, and at A, the marginal products of labor and capital are both equal to 20. Beginning at A, if the producer increases expenditures on labor by $1 and decreases expenditures on capital by $1, then
A. output remains constant and cost increases by $8. B. cost remains constant and output decreases by 8 units. C. cost remains constant and output increases by 12 units. D. cost remains constant and output increases by 20 units. E. output remains constant and cost decreases by $2.