The perfectly competitive firm maximizes profits when
A) it produces and sells the quantity at which the difference between marginal revenue and marginal cost is the greatest.
B) it produces and sells the quantity at which marginal revenue and marginal cost are equal.
C) it produces and sells the quantity at which the difference between average revenue and average cost is the greatest.
D) it produces and sells the quantity at which the difference between price and average cost is the greatest.
Answer: B
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Refer to the table shown. In trillions of dollarsConsumption3.5Investment1.2Government Purchases1.8Exports0.6Imports0.4What are the economy's net exports?
A. ?$0.4 trillion B. $1.0 trillion C. $0.2 trillion D. ?$0.2 trillion
Suppose when the price of movie tickets is $7.50, the quantity demanded is 550, and when the price is $8.50, the quantity demanded is 450. Using the mid-point method, the price elasticity of demand is:
A. -1.6 B. 0.625 C. -0.625 D. 1.6
Refer to the graph shown. Calculate the approximate elasticity of demand for the line segment CD:
A. 1/5. B. 5. C. 1/3. D. 3.
When a natural monopoly is regulated using an average cost pricing rule, what can you say about the firm's profit and the market's efficiency?
What will be an ideal response?