Suppose a profit-maximizing firm in a perfectly competitive market is earning an economic profit of $1,345. If the firm's fixed cost increases from $200 to $300, the firm will:
A. earn a smaller profit.
B. reduce its output.
C. earn a greater profit.
D. raise its price.
Answer: A
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Public saving is equal to national saving minus private saving
a. True b. False Indicate whether the statement is true or false
Judging from their statements, which of the following people is most likely to support supply-side economic policies?
a. Savana, who says government should increase corporate taxes to make the rich pay their fair share b. Leonardo, who says the government should spend more money to finance social welfare programs c. Brenda, who says government should ease its oversight of most types of businesses d. Octavio, who says the government should tax capital gains at regular income rates
Portfolio diversification eliminates all of the ___________ from a portfolio
A. risk B. diversifiable risk C. nondiversifiable risk D. risk from business cycle fluctuations
This table shows the marginal benefits from widgets obtained by the only three people who value them.Number of widgetsMarginal Value to?HelenIngridJane1st$10$8$62nd$4$3$23rd$2$1$1Suppose widgets cost $8.50 to produce. If widgets are a private good, how many will be produced by market incentives, and is that the right (efficient) number?
A. Two will be produced, and this is the socially optimal amount. B. One will be produced, and this is the socially optimal amount. C. Zero will be produced, and this is below the socially optimal amount. D. One will be produced, and this is below the socially optimal amount.