If price is greater than the average variable cost, a profit-maximizing firm should:
A) contract production until price is equal to marginal cost.
B) expand production until price is equal to marginal cost.
C) contract production until total revenue is equal to total cost.
D) expand production until total revenue is equal to total cost.
B
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Which one of these statements is correct?
What will be an ideal response?
Suppose you buy a new Tesla Model S. The battery that comes with the car is a(n)
A. intermediate good. B. financial good. C. final good. D. transfer good.
Provide a simple definition of the price elasticity of demand and explain why knowing the price elasticity for her product is useful to the firm's manager
What will be an ideal response?
If a dollar currently purchases 12.5 pesos and someone forecasts that in a year it will purchase 14 pesos, then the forecast is given in
a. real terms and implies the dollar will appreciate. b. real terms and implies the dollar will depreciate. c. nominal terms and implies the dollar will appreciate. d. nominal terms and implies the dollar will depreciate.