Suppose that marginal revenue for a perfectly competitive firm is $20 . When the firm produces 10 units, its marginal cost is $20, its average total cost is $22, and its average variable cost is $17
Then to maximize its profit in the short run, the firm A) should stay open and incur an economic loss of $20.
B) must increase its output to increase its profit.
C) must decrease its output to increase its profit.
D) should shut down.
E) should not change its production because it is already maximizing its profit and is making an economic profit.
A
You might also like to view...
China began pegging its currency, the yuan, to the dollar in 1994. Because the yuan was ________ at the pegged exchange rate, the level of Chinese exports remained ________ than they would have been if the exchange rate were allowed to float freely
A) overvalued; lower B) overvalued; higher C) undervalued; higher D) undervalued; lower
The use of a price system eliminates:
A. scarcity. B. equilibrium. C. shortages and surpluses. D. changes in supply and demand.
The price elasticity of demand for labor equals
A) the percentage change in the price of labor divided by the percentage change in the supply of labor. B) the change in the quantity demanded of labor divided by the change in the price of labor. C) the slope of the demand curve for labor. D) the percentage change in the quantity demanded of labor divided by the percentage change in the price of labor.
During 1999, the NASDAQ increased
A. 4%. B. 8%. C. 84%. D. 84 fold.