A firm facing a downward sloping demand curve is producing a level of output at which price is $7, marginal revenue is $5, and average total cost, which is at its minimum value, is $3. In order to maximize profit, the firm should
A. decrease price.
B. keep price the same.
C. increase price.
D. decrease output.
E. both c and d
Answer: A
You might also like to view...
If the nominal interest rate in an economy is 6%, and the rate of inflation in the economy is 4%, the real interest rate in the economy is:
A) 10%. B) 24%. C) 1.5%. D) 2%.
Use the figure above to answer this question. Consider a perfectly competitive firm in a short run equilibrium. Figure ________ shows a firm in bad times because the firm produces ________ units and makes a(n) ________
A) A; 100; economic loss B) A; 110; economic loss C) B; 90; economic profit D) C; 100; economic loss E) C; 100; normal profit
Pick the decision maker from the list below
A) The head of Al Qaeda B) The Taliban C) The Government of Afghanistan D) The Middle East E) All of the above are decision makers.
If the number employed is 190 million, the number unemployed is 10 million, and the working-age population is 250 million, then the labor force participation rate is
A) 4%. B) 5.2%. C) 60%. D) 76%. E) 80%.