If a perfectly competitive firm is producing 1,500 units and, at the 1,500th unit, the difference between marginal revenue and marginal cost (MR - MC) is negative, which of the following is true?
A) The firm should increase production to maximize profit.
B) The 1,500th unit costs less to produce than the firm earns in revenue.
C) The firm is maximizing profit.
D) The firm should decrease production to maximize profit.
D) The firm should decrease production to maximize profit.
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In the Fable of the Bees, it was found that contrary to popular belief among economists, but consistent with the Coase Theorem
a. apple growers would pay bee keepers for pollination services. b. bee keepers would pay orchard owners for access to their flowering trees. c. apple growers and bee keepers would reimburse each other for increasing output. d. the transactions costs of negotiating prevented any agreements from being reached between orchard owners and bee keepers.
Define discounted value of a future payment
What will be an ideal response?
Suppose labor productivity differences are the only determinants of comparative advantage, and Brazil and Chile both produce only coffee and sugar. In Chile, either 5 units of coffee or 2 units of sugar can be produced in one day. In Brazil, a day of labor produces either 2 units of coffee or 1 unit of sugar. What is the opportunity cost of producing coffee in Chile?
a. Half a pound of sugar b. Two-fifth of a pound of sugar c. 2 pounds of sugar d. One-third of a pound of sugar e. 4 pounds of sugar
The winner's curse occurs:
A. only in second-price, sealed-bid auctions. B. only in English auctions. C. in a common-values auction. D. in a private-values auction.