At its present rate of output, Barrel O' Biscuits, a perfectly competitive firm, finds that its marginal cost exceeds its marginal revenue and price exceeds average variable cost. To maximize profit, the firm should
a. lower the price
b. raise the price
c. increase output
d. reduce output
e. maintain its current rate of output
D
You might also like to view...
Most of the major currencies have had a floating exchange rate system since
A) 1973. B) 1944. C) 1956. D) 1971.
The real wealth effect is one reason for the negative slope of the aggregate demand curve
a. True b. False Indicate whether the statement is true or false
Using time-series data, the demand function for a profit-maximizing monopolist has been estimated asQd = 142,000 - 500P + 6M - 400PRwhere Qd is the amount sold, P is price, M is income, and PR is the price of a related good. The estimated values for M and PR in 2014 are $25,000 and $200, respectively. The short-run marginal cost curve for this firm has been estimated as:MC = 200 - 0.024Q + 0.000006Q2Total fixed cost is forecast to be $500,000 in 2016. The forecasted marginal revenue function for 2016 is:
A. MR = 200,000 - 0.004Q B. MR = 424 - 0.004Q C. MR = 110 - 0.002Q D. MR = 424 - 0.002Q E. MR = 120 - 0.002Q
In the United States, research and development spending as a percentage of GDP is:
A. 1.5 to 2.0 percent, which is lower than that of most other industrial countries. B. 2.5 to 3.0 percent, which is higher than that of most other industrial countries. C. 4.5 to 5.0 percent, which is lower than that of most other industrial countries. D. 5.5 to 6.0 percent, which is higher than that of most other industrial countries.