How many units should the firm produce? In other words, at what level of output does marginal cost equal marginal revenue?
a. 1
b. 2
c. 3
d. 4
c
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If the government institutes a specific tax for a good that has a perfectly inelastic demand curve
A) the producer passes the entire tax on to the consumer. B) the producer must absorb the entire tax. C) the producer can generally only pass part of the tax onto the consumer. D) the equilibrium price drops.
If wages drop below the market equilibrium level in a competitive labor market:
A. firms will demand more labor than workers are willing to supply. B. firms will have to offer higher wages to attract the workers they need. C. there won't be enough workers willing to work at that wage. D. All of these statements are true.
An insurance policy is a contract that:
a. benefits the parties if they have the same degrees of risk aversion. b. benefits the parties if both of them are risk neutral. c. benefits the parties if they have different degrees of risk aversion. d. benefits the parties if either of them is risk neutral.
Statistical studies suggest that the cost of direct controls for any target level of pollution is
a. much higher than the cost of taxes on emissions. b. about the same as the cost of taxes on emissions. c. lower than the cost of taxes on emissions. d. impossible to compare to the cost of taxes on emissions.