If a firm's marginal revenue is below its marginal cost, an increase in production will usually
a. increase profits.
b. leave profits unchanged.
c. decrease profits.
d. increase marginal revenue.
c
You might also like to view...
Most total product curves have
A) first increasing and then decreasing marginal returns to labor. B) output first increasing and then decreasing as labor is added. C) first decreasing and then increasing marginal returns to labor. D) output increasing at an increasing rate as labor is added.
A dominated strategy
A) exists when one firm is weaker than another. B) only occurs in a mixed strategy scenario. C) is one that is never used by a rational actor. D) is a characteristic of games with multiple Nash equilibria.
Suppose the economy is in long-run equilibrium. Concerns about pollution cause the government to significantly restrict the production of electricity. At the same time, taxes fall. In the short-run
a. real GDP will rise, and the price level might rise, fall, or stay the same. b. real GDP will fall, and the price level might rise, fall, or stay the same. c. the price level will rise, and real GDP might rise, fall, or stay the same. d. the price level will fall, and real GDP might rise, fall, or stay the same.
A purely competitive firm is producing at the point where its marginal cost equals the price of its product. If the firm increases its output, then total revenue will:
A. decrease and profits will increase. B. increase and profits will decrease. C. increase and profits will increase. D. decrease and profits will decrease.