A monopolist maximizes its profits by selling up to the point where:
a. its price equals its marginal cost.
b. its price equals its marginal revenue.
c. its marginal revenue equals its marginal costs.
d. the difference between its price and average cost is maximized.
Ans: c. its marginal revenue equals its marginal costs.
You might also like to view...
Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
In the long run, firms in monopolistic competition have excess capacity
Indicate whether the statement is true or false
What is a command economy?
What will be an ideal response?
The business cycle is usually illustrated using movements in
A) the inflation rate. B) labor productivity. C) real GDP. D) the size of the labor force.