At its current level of quantity, a perfectly competitive firm's marginal revenue is $3.25, its short-run marginal cost is $3.25 and its long-run marginal cost is $3.00. Which of the following statements is true?
A) The firm is maximizing its short-run profit, but not its long-run profit.
B) The firm should increase its production to maximize profit in the short-run.
C) The firm is maximizing its long-run profit, but not its short-run profit.
D) The firm should decrease its production to maximize profit in the short-run.
A) The firm is maximizing its short-run profit, but not its long-run profit.
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The primary purpose of ________ is to encourage the expenditure of funds on research and development to create new products
A) patents and copyrights B) nationalizing oil companies C) government-run health care D) centrally planned economies
An explicit cost is: a. an opportunity cost for which payment is not required. b. an out-of-pocket expense
c. always larger than an associated implicit cost. d. both (a) and (b)
The long-run industry supply curve in perfect competition is derived from the
a. short-run industry supply curve which shifts as new firms enter the industry. b. short-run industry supply curve which shifts as old firms exit the industry. c. freedom of firms from sunk costs so that new cost curves become long-run curves. d. All of the above reasons.
If a government increases its budget deficit, then domestic interest rates
a. and net exports rise. b. rise and net exports fall. c. fall and net exports rise. d. and net exports fall.