If firms are producing at a profit-maximizing level of output where the price is equal to the average total cost:
A. accounting profits may be negative.
B. accounting profits must be zero.
C. economic profits may be positive.
D. economic profits must be zero.
D. economic profits must be zero.
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What is the difference between a normal good and an inferior good. Give an example of each
What will be an ideal response?
The above figure shows the cost curves for a competitive firm. If the profit-maximizing level of output is 40, price is equal to
A) $0. B) $15. C) $10. D) $11.
If the economy is suffering a recession, inventories are probably falling.
Answer the following statement true (T) or false (F)
Because firms in perfectly competitive markets can sell any quantity without driving down prices, they should:
A. produce as much as possible to maximize profits. B. produce at the lowest cost per unit to maximize profits. C. try to flood the market. D. increase quantity until the additional profit it earns on its last unit sold is zero.