Suppose a perfectly competitive firm faces the following short-run cost and revenue conditions: ATC = $700; AVC = $500; MC = $600; MR = $600. The firm should
A. increase output.
B. decrease output.
C. shut down.
D. continue to produce its current output.
Answer: D
You might also like to view...
The law of supply states that other things remaining the same, a decrease in the price of a kayak leads to
A) a decrease in the supply of kayaks. B) a decrease in the quantity of kayaks supplied. C) an increase in the supply of kayaks. D) an increase in the quantity of kayaks supplied. E) an increase in the supply of kayaks and a decrease in the quantity of kayaks supplied.
A person goes into a store and buys a computer for $1,210. In this case, price is acting as a
A) resource. B) good. C) rationing device. D) capital instrument. E) factor of production.
The second-order condition for a firm maximizing its profits operating in a perfectly competitive market is:
A. ? (dMC/dQ) < 0. B. (d2?/dQ2) < 0. C. ? (d2C(Q)/dQ2) < 0. D. All of the statements associated with this question are correct.
Figure 18.1Refer to Figure 18.1. After trade begins, ________ will specialize in the production of bicycles and ________ will specialize in the production of hang gliders.
A. the United States.; the United States B. the United States; Canada C. Canada; the United States D. Canada; Canada