If marginal cost exceeds marginal revenue, a profit-maximizing firm should
a. expand output until marginal cost equals marginal revenue.
b. expand output until marginal revenue equals price.
c. reduce output until marginal cost equals marginal revenue.
d. reduce output until price equals average total cost.
C
You might also like to view...
On a straight-line downward-sloping demand curve, the maximum elasticity of demand occurs
A) at its vertical intercept. B) at its midpoint. C) at its horizontal intercept. D) where it intersects the supply curve.
The interest rate is 4 percent in the U.K. and 3 percent in the U.S. for 90 days. The current spot rate is $2.00/£ and the forward rate is $1.96/£. If a U.S.-based investor expects the spot rate to remain at $2.00/£ in 90 days, the expected uncovered interest rate differential would be ________ in favor of the ________ investment.
A. 2%; dollar B. 2%; pound C. 1%; pound D. 1%; dollar
Higher saving rates mean higher future growth rates because
A) the banks have more money to distribute to their shareholders. B) saving contributes to more investment, which yields a larger capital stock. C) the interest earned from savings gives you more wealth. D) saving contributes to less investment, which yields a larger capital stock.
Interest rate parity occurs when
A) interest rates are equal across nations. B) interest rate differentials are always maintained across nations. C) interest rates no longer affect the exchange rate. D) prices are equal across nations when exchange rates are taken into account. E) the interest rate in one currency equals the interest rate in another currency when exchange rate changes are taken into account. The figure above shows the demand curve for dollars in the foreign exchange market.