Refer to Table 8.5. Assume that fruit baskets are sold in a perfectly competitive market. The market price of a fruit basket is $15. To maximize profits, Exotic Fruit should sell __________ fruit basket(s).
A) zero
B) two
C) three
D) five
D) five
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When the Fed sells government securities in the open market, the money supply ________ because ________
A) decreases; banks lose liquidity, they make fewer loans and checking account deposits decrease B) increases; banks gain liquidity, they make more loans and checking account deposits increase C) increases; banks lose liquidity, they make more loans and checking account deposits increase D) decreases; banks gain liquidity, they make fewer loans and checking account deposits decrease E) none of the above
Money serves the following function(s):
(a) Medium of exchange (b) Store of value (c) Unit of account (d) All of the above
Both the monetarist view of the economy and the simple quantity theory of money hold that velocity is constant
Indicate whether the statement is true or false
The demand curve perceived by a perfectly competitive firm
A. is horizontal B. shows economies of scale over a large range of output C. shows that such a firm is a price-marker D. all of the above