Refer to the table below. If Fresh Laundry is currently producing 2 quality units, to maximize profit, Fresh Laundry should ________ the number of quality units as the current quality marginal revenue is ________ than its marginal cost.
Fresh Laundry is a firm that produces laundry detergent. The table above summarizes Fresh Laundry's product quality marginal revenue and marginal cost at various quality levels.
A) increase; greater
B) decrease; greater
C) increase; less
D) decrease; less
A) increase; greater
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Explain what the slope of the income consumption curve shows about the income elasticity of demand
What will be an ideal response?
Often economists measure the loss in consumer surplus by looking at the changing area below the Marshallian demand curve. This approach will provide a more accurate measure of the compensating variation of such a price increase if: a. the good occupies a small portion of a person's budget
b. the good occupies a large portion of a person's budget. c. the good has many close substitutes. d. the good has few substitutes.
Suppose that the alternative uses of an hour of your time in the evening, ranked from best to worst, are (1) study economics, (2i) watch two half-hour TV sitcoms, (3) play pool, and (4) jog around town. You can only choose one activity. What is the opportunity cost of studying economics for one hour, given this information? a. Jogging around town
b. Watching two half-hour TV sitcoms. c. Playing pool. d. The sum of watching two half-hour TV sitcoms, playing pool, and doing your laundry.
Which of the following will tend to occur if price controls are imposed on a product?
a. persistent shortages b. illegal markets c. illicit channels of distribution d. industry investment slows or stops e. All of the above are correct.