A firm operating with diminishing total returns cannot be profit maximizing
What will be an ideal response?
True. This firm could produce more output with fewer inputs. This cannot be profit maximizing.
You might also like to view...
Under pure competition, the market price of an output is $3. The output schedule of a firm using input X is listed in the table below. If the price of input X is $12, how many units of input X will the firm employ to maximize profits?Units of XMarginal Product110.029.938.847.756.665.574.483.392.2
A. 5 B. 7 C. 4 D. 9
Suppose Dublin Electronics charges regular customers $90 for a Blu-ray player but allows senior citizens to purchase the same item for $75. Is this likely to be a successful price discriminating strategy?
A) No, because there are many different brands of Blu-ray players and consumers will shop around. B) Yes, because senior citizens are likely to have a more elastic demand and therefore will be willing to pay a lower price compared to regular customers. C) Yes, firms price discriminate to maximize profits. D) No, price discrimination will not be effective because the store cannot prevent senior citizens from buying large quantities of Blu-ray players and reselling them for a profit.
If the MPC is b, then the multiplier is
A) 1/(1 - b). B) b/(1 - b). C) 1/(1 + b). D) b/(1 + b).
The transaction motive for holding money
A. varies inversely with income. B. varies directly with the number of times one is paid annually. C. are used to make expected expenditures. D. are held for the same reasons that precautionary cash balances are held.