A monopolistically competitive firm minimizes its losses by producing where MR = MC as long as
A. P > AFC.
B. P > AVC.
C. P > MR.
D. P > ATC.
Answer: B
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In considering the costs involved for student loans that must be repaid in ten years, this Application is addressing the economic concept of
A) the principle of diminishing returns. B) the real-nominal principle. C) the marginal principle. D) the principle of voluntary exchange.
After graduating from Harvard Law School, Anne started looking for a job. She could not find a job after looking for one week. Which of the following is true in this case? a. This is an example of frictional unemployment. b. This is an example of cyclical unemployment. c. This is an example of seasonal unemployment. d. She is underemployed
e. She is a discouraged worker.
Assume that supply decreases slightly and demand decreases greatly. Which of the following will happen?
a. Equilibrium price will fall and equilibrium quantity will rise. b. Equilibrium price will rise and equilibrium quantity will fall. c. Equilibrium price will rise and equilibrium quantity will rise. d. Equilibrium price will fall and equilibrium quantity will fall. e. Neither equilibrium price nor equilibrium quantity will change.
Suppose Blu-ray discs are sold in a perfectly competitive market. The current market price of Blu-ray discs is $15. If at the current level of production of compact discs you calculate the marginal cost to your company is also $15, and that AVC is rising, in the short run your company should:
A. produce more Blu-ray discs. B. produce fewer Blu-ray discs. C. continue producing the current level of Blu-ray discs. D. raise the price of its Blu-ray discs.