Explain two different ways to determine the profit-maximizing level of output for a firm in a perfectly competitive market
What will be an ideal response?
One way is using total revenue and total cost. The profit maximizing level of output is where the difference between total revenue and total cost is the greatest. Another way is using marginal revenue and marginal cost. The profit-maximizing level of output is where marginal revenue equals marginal cost.
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The demand curve faced by the individual perfectly competitive firm is:
A) downward sloping. B) upward sloping. C) horizontal. D) vertical.
When monetary policies result in a worsening of economic performance, the least likely explanation is ________
A) a political business cycle B) changes in one or more key structural parameters of the economy C) a policy-induced change in the expectations and behaviors of households and businesses D) faulty interpretation of incomplete and ambiguous economic data
Jim left his previous job as a sales manager and started his own sales consulting business. He previously earned $70,000 per year, but he now pays himself $25,000 per year while he is building the new business
What is the economic cost of the time he contributes to the new business? A) $25,000 per year B) zero C) $70,000 per year D) $45,000 per year
When there is a tendency for a particular product to come into favor with additional consumers because other consumers have chosen to purchase the product
A) negative market feedback occurs. B) positive market feedback occurs. C) there is no dominant strategy. D) a price war must result.