If a purely competitive firm is producing at the P = MC output and realizing an economic profit, at that output:
A. marginal revenue is less than price.
B. marginal revenue exceeds ATC.
C. ATC is being minimized.
D. total revenue equals total cost.
Answer: B
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When the Federal Reserve increases its target rate of inflation, it will set a ________ real interest rate at every inflation rate and the aggregate demand curve will ________.
A. higher; shift to the right B. lower; shift to the left C. higher; shift to the left D. lower; shift to the right
A firm may find it optimal to stay in business in the short run even if total revenue does not cover total cost
a. True b. False
The unemployment rate in the United States:
A. can be zero in both expansions and recessions. B. equals zero during booms. C. falls to zero during expansions. D. never falls to zero.
Refer to the above figure. Suppose demand is D2 and then increases to D3. The change in economic rent is
A. area CIHF. B. area BJC. C. zero. D. area CIGO.