The perfectly competitive firm maximizes profits when
A. it produces and sells the quantity at which the difference between price and average cost is the greatest.
B. it produces and sells the quantity at which marginal revenue and marginal cost are equal.
C. it produces and sells the quantity at which the difference between marginal revenue and marginal cost is the greatest.
D. it produces and sells the quantity at which the difference between average revenue and average cost is the greatest.
Answer: B
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Traditionally, elementary and secondary education was an enterprise of state government
a. True b. False
If Ben values good X more than good Y and Catherine values good Y more than good X a firm can increase its profits by
A) charging the same price for both goods. B) bundling the goods. C) selling the goods in a competitive market. D) charging one price per good.
Refer to the accompanying figure. At a price of $9, there will be:
A. an excess demand of 5 units. B. an excess supply of 5 units. C. an excess supply of 6 units. D. an excess demand of 1 unit.