If the marginal revenue of the next unit a firm produces is $50 and its marginal cost is $35, a firm should:
A. increase production.
B. reconsider past production decisions.
C. decrease production.
D. hold production constant.
Answer: A
You might also like to view...
As sales of digital cameras increase, so do sales of photo printers. What factor is affecting demand?
a. consumer expectation b. consumer taste c. complements d. substitutes
If the probability of losing your job remains ________, a recession would be a good time to purchase a home because the Fed usually ________ interest rates during this time
A) low; lowers B) low; raises C) high; lowers D) high; raises E) low; does not change
Assume households have positive wealth. If the income effect is ________ the substitution effect, a decrease in interest rates will increase saving and decrease consumption spending by households.
A. greater than B. unrelated to C. less than D. equal to
The use of government spending and taxation for the purpose of stabilizing the economy is called
A. budget policy. B. monetary policy. C. fiscal policy. D. trade policy.