A monopolist earning short-run economic profit determines that at its present level of output, marginal revenue is $23 and marginal cost is $30 . Which of the following should the firm do to increase profit?
a. Raise price and lower output.
b. Lower price and lower output.
c. Raise price and raise output.
d. Lower price and raise output.
e. Lower output but leave price unchanged.
A
You might also like to view...
If workers accurately predict the rate of inflation, is there a short-run trade-off between inflation and unemployment, as predicted by the Phillips curve? Why or why not?
What will be an ideal response?
If the central bank targets a rate of nominal GDP growth, then it would have to _____ money growth when nominal GDP fell below its target in order to _____ inflation and ____ real GDP
a. increase; increase; increase b. increase; decrease; decrease c. decrease; decrease; decrease d. decrease; decrease; increase
The European Union Emission Trading Scheme is an example of:
a. a pollution tax. b. a pollution subsidy. c. a command approach. d. cap and trade. e. enforcing private property rights.
Suppose that the firm's only variable input is labor. When 50 workers are used, the average product of labor is 50 and the marginal product of labor is 75. The wage rate is $80 and the total cost of the fixed input is $500.What is average variable cost?
A. $10.00 B. $0.63 C. $1.60 D. $3.20 E. none of the above