If a firm in a perfectly competitive market faces a market price of $7, and it decides to increase its production from 4,000 to 12,000 units, the firm's marginal revenue will:
A. diminish once diminishing marginal product sets in.
B. rise once diminishing marginal product sets in.
C. stay the same.
D. increase from $28,000 to $84,000.
C. stay the same.
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Refer to Figure 3-1. An increase in taste or preference would be represented by a movement from
A) A to B. B) B to A. C) D1 to D2. D) D2 to D1.
Best Lights wants to prevent Bright Lights from entering the light bulb market. If Best Lights advertises that it will always undercut any competitor's price, the effect of advertising ________ Best Lights' profits due to its cost and ________ Best Lights' profits due to a(n) ________ in its demand.
A) decreases; increases; increase B) decreases; decreases; decrease C) increases; increases; increase D) decreases; decreases; increase
If a firm shuts down, its
A. fixed costs remain unchanged. B. revenue will fall to zero. C. short-run variable costs will fall to zero. D. All of the responses are correct.
How would an increase in cigarette taxes succeed according to the following criteria: collecting a large amount of tax revenue; distorting demand as little as possible; discouraging consumption of harmful commodities?