Perfectly competitive firms and monopolist firms both maximize profit where
a. price equals marginal cost
b. total revenue is maximized
c. average total cost is minimized
d. marginal cost equals marginal revenue
e. price is as high as possible
D
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Which of the following statements is inconsistent with an elastic demand curve?
A. The relative change in quantity exceeds the relative change in price. B. Total revenues fall when prices rise. C. Buyers are relatively sensitive to price changes. D. The absolute value of the price elasticity of demand is less than 1.
Which of the following is a property of a good economic question?
A) A good economic question should never incorporate elements from disciplines other than economics. B) A good economic question should always have a single solution. C) A good economic question can be answered. D) A good economic question always addresses topics that are important to the whole society and not to an individual economic agent.
Financial intermediaries reduce the costs of negotiation by
A) investing in a large number of projects with independent returns. B) gaining expertise in evaluating and monitoring investments. C) investing in a small number of projects with independent returns. D) pooling funds.
When consumer spending and consumption decrease, consumer confidence tends to
A. fall. B. rise. C. remain the same. D. be unpredictable.