A decrease in the price of a firm's output
A) raises the value of marginal product of each unit of labor.
B) shifts the firm's demand for labor curve rightward.
C) results in the firm increasing the amount of output it produces.
D) None of the above is correct.
D
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As long as price is greater than average variable cost, a firm maximizes its profit by producing that quantity of output for which
a. average revenue equals average total cost b. the price is the highest c. marginal revenue equals marginal cost d. average total cost is minimized e. average variable cost is minimized
The government often intervenes when private markets fail to provide an optimal level of certain goods and services. For example, the government imposes an excise tax on gasoline to account for the negative externality that drivers impose on one another. Why might the private market not reach the socially optimal level of traffic without the help of government?
Assume the demand and supply functions for good X can be written as Qd = 1000 - 40Px Qs = -200 + 20Px In this example, equilibrium price is $20 and the equilibrium quantity is 200
Indicate whether the statement is true or false
If a restaurant served free steaks, people would consume more and more steaks until their ________ fell to zero.
A. marginal utility B. total utility C. consumer surplus D. None of the choices are correct.