If the market price is $4 and a perfectly competitive firm is producing 500 units and the marginal cost to produce the 500th unit is $4, which of the following is true?
A) The firm is maximizing profit.
B) The difference between marginal revenue and marginal cost (MR - MC) for the 500th unit is negative.
C) The difference between marginal revenue and marginal cost (MR - MC) for the 500th unit is positive.
D) The firm should increase production to maximize profit.
A) The firm is maximizing profit.
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If a monopolist's price is $50 at the output where marginal revenue equals marginal cost and average total cost is $43, then the incremental profit from the last unit sold is $7
Indicate whether the statement is true or false
One of the results of the knowledge economy
A) is that content matters. B) is that the information content of a good can be distinguished from the physical product. C) is that the information content of a good cannot be distinguished from the physical product. D) is that the physical features of the product has become more important.
If the price of a product increases, we would expect
A. quantity supplied to increase. B. the level of supply to increase. C. the level of demand to decrease. D. an increase in quantity demanded.
Refer to the below graph. Given the total product curve shown and assuming a competitive labor market, if a firm can sell widgets for $12, then what is the maximum amount it will pay the fourth worker each day?
A. $24
B. $48
C. $61
D. $732