If a competitive price-taker firm is currently producing a level of output at which marginal revenue exceeds marginal cost, then
a. a one-unit increase in output will increase the firm's profit.
b. a one-unit decrease in output will increase the firm's profit.
c. total revenue exceeds total cost.
d. total cost exceeds total revenue.
A
You might also like to view...
The method of determining the value of land by determining what similar properties have sold for in the recent past is called the ________
Fill in the blank(s) with correct word
Using the data in the above table, if potential GDP for this economy is $25 billion, then in order to restore full employment, the federal funds rate can be
A) lowered so that government expenditure on goods and services increase. B) raised so that consumption expenditure, investment, and net exports increase. C) lowered so that consumption expenditure, investment, and net exports increase. D) raised so that net exports increase. E) lowered so that consumption expenditure and investment increase, though net exports decrease.
John is trying to decide whether to expand his business or not. If he continues his business as it is, with no expansion, there is a 50 percent chance he will earn $100,000 and a 50 percent chance he will earn $300,000. If he does expand, there is a 30 percent chance he will earn $100,000, a 30 percent chance he will earn $300,000 and a 40 percent chance he will earn $500,000. It will cost him $150,000 to expand. If John decides to expand based on expected value, it means that:
A. the difference in expected earnings from expanding versus not must exceed $150,000. B. the sum of expected earnings from expanding and from not must exceed $150,000. C. the difference in expected earnings from expanding versus not must not exceed $150,000. D. his expected earnings from expansion must exceed $150,000.
"A reduction in gasoline prices caused the demand for gasoline to increase. The lower gas prices also led to an increase in demand for large cars, causing their prices to rise." These statements
a. are essentially correct. b. contain one error; the lower gasoline prices would cause an increase in the quantity demanded of gasoline, not an increase in demand. c. contain one error; the lower gasoline prices would increase the quantity demanded of large cars, not the demand. d. contain two errors; the lower gasoline prices would cause the quantity of gasoline demanded (rather than the demand) to increase, and the lower gasoline price would cause an increase in quantity demanded (rather than the demand) for large cars.