Refer to the data provided in Table 9.1 below to answer the question(s) that follow.
Table 9.1
Refer to Table 9.1. If the market price is $10, then for this firm to maximize profits it should produce ________ unit(s) of output.
A. zero
B. one
C. two
D. three
Answer: A
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Refer to Figure 26-7. Suppose the economy is in a recession and the Fed pursues an expansionary monetary policy. Using the static AD-AS model in the figure above, this would be depicted as a movement from
A) C to B. B) A to B. C) A to E. D) C to D. E) B to C.
The price elasticity of demand for color printers is 1.6 and you would like to see the quantity demanded for color printers to increase by 32%. Then the percentage change in price should be:
A. 10%. B. 15%. C. 20%. D. 25%.
A firm seeking to maximize economic profits should produce at the output at which
A) total revenue equals total cost. B) marginal revenue equals marginal cost. C) average revenue equals average cost. D) marginal revenue equals average revenue.
Assume that the price elasticity of demand is ?0.75 for a certain firm's product. If the firm lowers price, the firm's managers can expect total revenue to:
A. remain constant. B. decrease. C. increase. D. either increase or remain constant, depending upon the size of the price decrease.