Samurai Sam's, a producer of frozen sushi, is a monopolistically competitive firm. The firm is currently selling frozen California rolls at a $4 price. Samurai Sam's marginal cost is $1.75 and its marginal revenue is $1.50. The firm should ________ to maximize profits in the short run.
A. decrease output to where price just equals marginal cost
B. continue to produce the same output level
C. increase output to where price just equals marginal cost
D. Indeterminate from the given information.
Answer: A
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Refer to Figure 19-5. Suppose the Chinese government decides to abandon pegging the yuan to the dollar at a rate which undervalues the yuan
Using the figure above, the equilibrium exchange rate would be ________ and Chinese exports to the United States would ________ in price. A) $0.11/yuan; increase B) $0.11/yuan; decrease C) $0.14/yuan; increase D) $0.13/yuan; increase E) $0.13/yuan; decrease
Early nineteenth century banks primarily
(a) enabled small savers to buy shares in a diversified portfolio of investments. (b) accepted and managed checkable deposits. (c) provided a broad range of financial services. (d) relied on a federal safety fund in times of well spread crisis.
When the Patient Protection and Affordable Care Act is fully implemented, it will
a. substantially reduce the share of health care expenses paid by a third party. b. require individuals to pay an annual tax-penalty of up to $695 if they do not have an approved health insurance plan. c. require firms with fewer than 50 employees to provide health insurance for their workers. d. make it legal for individuals to purchase health insurance from an insurer in another state.
Taxes cause deadweight losses because they
a. lead to losses in surplus for consumers and for producers that, when taken together, exceed tax revenue collected by the government. b. distort incentives to both buyers and sellers. c. prevent buyers and sellers from realizing some of the gains from trade. d. All of the above are correct.