A perfectly competitive firm's marginal revenue exceeds its marginal cost at its current output. To increase its profit, the firm will
A) lower its price.
B) raise its price.
C) decrease its output.
D) increase its output.
D
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The quantity of money demanded is proportional to
A) real GDP. B) the price level. C) the nominal interest rate. D) the real interest rate. E) the inflation rate.
The figure above shows the market for coffee. Coffee is a normal good. If consumers' incomes fall, the efficient quantity of coffee will ________ and the producer surplus will ________
A) increase; increase B) increase; decrease C) decrease; decrease D) decrease; increase
Claire has just eaten her second bowl of cereal. We can say:
A. her second bowl likely reduced her total utility. B. her second bowl likely added less to her total utility than the first. C. her third bowl will likely decrease her total utility. D. her third bowl will likely increase her total utility by at least as much as the second.
In a certain monopolistically competitive market that is characterized by high prices and equally high-quality merchandise, if a firm's competitors begin to successfully introduce new products that cut into the firm's market share, the firm's best counter-strategy is to:
a. raise prices in order to increase the revenue. b. introduce few new products in order to meet competitors head on. c. reduce its advertising budget in order to save costs. d. ignore its competitors and hope its customers' loyalty carry it through the threat. e. look to the government for protection.