If a profit-maximizing firm is currently producing output where MR = MC in the short run, it should
A. decrease output.
B. increase output.
C. not change output.
D. shut down.
Answer: C
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If a firm hires workers up to the point where the value of their marginal product equals their wage, then the firm is
a. minimizing labor costs. b. maximizing profit. c. maximizing the MP of labor. d. minimizing average costs.
If C = $400, I = $100, G = $50, NX = $30, and NFP = $5, how much is GDP?
A) $580 B) $575 C) $585 D) $550
The negative relationship between unemployment and inflation is known as the
A) aggregate supply curve. B) aggregate demand curve. C) Phillips curve. D) efficiency wage line.
In a closed economy, aggregate demand is the sum of
A) consumer expenditure, actual investment spending, and government spending. B) consumer expenditure, planned investment spending, and government spending. C) consumer expenditure, actual investment spending, government spending, and net exports. D) consumer expenditure, planned investment spending, government spending, and net exports.