When the long-run average total cost curve is increasing, this means that there are
a. economies of scale
b. diseconomies of scale
c. constant returns to scale
d. diminishing returns
e. some fixed factors of production
B
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A demand curve with an elasticity of 1.0 is a unit-elastic demand curve.
Answer the following statement true (T) or false (F)
Profit maximization requires that
A) the marginal factor cost of every input equals that input's marginal physical product. B) the marginal factor cost of every input equals that input's marginal revenue product. C) the amount of one input hired divided by the amount of another input hired equals the total costs of the first input hired divided by the total costs of the second input. D) equal amounts of each input are employed.
Assume the table shown is for a hat factory, and shows the total production of hats given various numbers of employees. Adding a third worker increases production:
A. by 60 hats.
B. by more than the second worker.
C. to 110 hats.
D. All of these are true.
If a firm's marginal revenue exceeds its marginal cost, it should
a. raise its price b. advertise more c. lay off a few employees d. cut back its overhead e. increase its output