In the above figure, the profit-maximizing output and price for this monopolistically competitive firm are
A) 10,000 units at a price of $10 per unit.
B) 10,000 units at a price of $5 per unit.
C) 13,000 units at a price of $7 per unit.
D) 12,000 units at a price of $8 per unit.
A
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The reason the marginal cost curve increases as output increases for the typical firm is because
A. more productive resources must be employed as a firm increases output. B. less productive resources must be employed as a firm increases output. C. of diseconomies of scale. D. of diminishing marginal benefit.
Keynes believed that the way to prevent recessions and depressions was to
A) increase aggregate demand through expansionary fiscal policy. B) maximize the crowding out effect. C) only change tax rates as a means of regulating the economy. D) reduce spending when there is a recessionary ga
Suppose a paper mill emits noxious odors that represent a negative externality for people living near the plant
If the plant managers ignore these external effects on their neighbors, what is the efficiency character of the resulting market outcome? A) The plant generates too much paper due to incomplete information. B) The plant generates too much paper because the odors are nonexclusive. C) The plant generates too much paper because the managers ignore the external costs of the air pollution on the neighbors. D) The market outcome is efficient.
When production reflects consumer preferences, ________ occurs
A) allocative efficiency B) productive efficiency C) equity D) efficient central planning