Assume that price is greater than average variable cost. If a perfectly competitive seller is producing at an output where price is $11 and the marginal cost is $14.54, then to maximize profits the firm should
A) continue producing at the current output.
B) produce a smaller level of output.
C) produce a larger level of output.
D) There is not enough information given to answer the question.
B
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Which of the following is not one of the assumptions of a perfectly competitive market?
A) Better information for producers than consumers. B) Homogeneous product. C) Free entry and exit. D) Large number of buyers and sellers.
Refer to the figure above. Which of the following is likely to happen if a price control above the equilibrium price is imposed?
A) Quantity demanded will exceed quantity supplied. B) Quantity supplied will exceed quantity demanded. C) Consumer surplus will increase. D) Producer surplus will decrease.
The supply schedule and the supply curve are just two __________ ways of showing the same information.
a. numeric b. graphical c. identical d. different
Factors of production such as labor and capital
A. are complementary. B. can be complements and also substitutes. C. are substitutable. D. can be neither complements nor substitutes.