A perfectly competitive firm will maximize its profit at the rate of output where the vertical distance between its total revenue curve and total cost curve is the largest. This is the same rate of output where
A) marginal revenue equals marginal cost. B) marginal revenue equals marginal profit.
C) marginal revenue equals average revenue. D) average total cost equals marginal revenue.
A
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When the Fed raises the legal reserve requirement, it
a. lowers the cost of borrowing from the Fed, allowing banks to make more loans b. raises the cost of borrowing from the Fed, disallowing banks from making the same quantity of loans c. increases the amount of excess reserves that banks hold, allowing them to make more loans d. increases the amount of excess reserves that banks hold, disallowing them from making the same quantity of loans e. decreases the amount of excess reserves that banks hold, disallowing them from making the same quantity of loans
A basic message of Ricardo's theory of comparative advantage is that
What will be an ideal response?
The major similarity between monopolistic competition and perfect competition is
A. both assume products are differentiated. B. that both assume many buyers and sellers. C. the shape of the demand curve. D. price equals marginal revenue in each.
Taxes can be used to internalize negative externalities.
Answer the following statement true (T) or false (F)