A monopolistically competitive firm is operating at a short-run level of output where price is $21, average total cost is $15, marginal cost is $13, and marginal revenue is $13. In the short run this firm should:
A. increase the level of output.
B. reduce product price.
C. make no change in the level of output.
D. decrease the level of output.
Answer: C
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A) greater than B) exactly twice C) equal to D) less than
As relative prices in various industries change due to trade, the marginal product of fixed resources used in the expanding industry __________, and the marginal product of fixed resources used in the contracting industry __________.
a. rises; falls b. remains the same; remains the same c. changes by exactly the same percentage; changes by exactly the same percentage d. falls; rises
The benefit valuations for a product are gut feelings that occur:
A. after marginal thought. B. instantaneously. C. after careful thought. D. after conscious weight is given to the cost of the product.
Refer to Table 13-4. Victoria's profit-maximizing output is where
A) total profit equals $3. B) marginal revenue and marginal cost both equal $4. C) marginal cost is at its minimum value. D) marginal revenue and marginal cost both equal $3.