The figure above shows a perfectly competitive firm. When the firm maximizes its profit, its total revenue is
A) $1,200.
B) $900.
C) $600.
D) unable to be determined without more information.
A
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Economists often treat the economy's capital stock as fixed because
A) labor is a more important factor of production than capital, so economists ignore capital. B) it takes a long time for new investment and the scrapping of old capital to affect the overall quantity of capital. C) there is very little capital in the economy compared with the amount of labor. D) unless the interest rate changes, the capital stock doesn't change.
The purpose of making assumptions in economic model building is to
A) force the model to yield the correct answer. B) minimize the amount of work an economist must do. C) simplify the model while keeping important details. D) express the relationship mathematically.
Multinational businesses produce and sell goods around the world
a. True b. False Indicate whether the statement is true or false
The invisible hand principle indicates that competitive markets can help promote the efficient use of resources
a. only if buyers and sellers really care, personally, about economic efficiency. b. even when each market participant cares only about their own self interest rather than about the overall efficiency of resource use. c. even if business firms fail to produce goods efficiently. d. if, and only if, businesses recognize their social obligation to keep costs low and use resources wisely.