Under conditions of perfect competition, if a profitable firm pushes its output beyond the point where MR equals MC,
a. profits increase.
b. profits diminish.
c. AFC increases.
d. AVC decreases.
b. profits diminish.
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In a competitive labor market, a minimum wage law set above the equilibrium wage rate
A) creates a shortage of labor. B) causes equality between the quantity of labor supplied and the quantity demanded. C) creates a surplus of labor. D) lowers the wage rate paid to workers. E) has no impact.
When a negative externality is present in a market, when a quota is imposed, it is:
A. efficient, because the market consumes the efficient level. B. not efficient, because individuals' net benefits from the amount set by the quota are different. C. efficient, because the net benefit of everyone at the amount set by the quota is equal. D. not efficient, because the marginal cost outweighs the marginal benefit for too many consumers at the amount set by the quota.
In 2011 the largest percentage of federal government spending was on
a. national defense. The largest source of federal revenues was from corporate income taxes. b. health. The largest source of federal revenues was from individual income taxes. c. income security. The largest source of federal revenues was from corporate income taxes. d. income security. The largest source of federal revenues was from individual income taxes.
An increase in labor productivity will shift
A) MRP curve to the left. B) MFC curve to the right. C) MRP curve to the right. D) MFC curve to the left.