Refer to the data provided in Table 9.4 below to answer the question(s) that follow.
Table 9.4qTFCTVCTCMCAVCATC0$100 $0$100 ---- -- 11004014040 40 140 21006016020 30 80 31009019030 30 63.334100124 224 343156 5100180 280 56 36 56 6100 264 364 84 44 60.677100 372 472 108 53.14 67.42Refer to Table 9.4. The market price is $84 and this firm is producing four units of output. Which of the following would you recommend to this firm?
A. Increase output to seven units so that price is less than marginal cost.
B. Continue producing four units of output, because the firm is able to make an economic profit.
C. Increase output to six units, so that marginal cost equals marginal revenue.
D. Reduce price to $34, so that marginal cost will equal marginal revenue at 4 units of output.
Answer: C
You might also like to view...
For consumers, computers are a complement to computer software. Suppose the price of a computer falls. Simultaneously, suppose that the number of companies selling computer software decreases
How do these changes affect the price and quantity of computer software?
The benefits paid by the largest pension program in the United States are: a. not adjusted for changes in the price level
b. adjusted for changes in the price level. c. revised every five years. d. adjusted for changes in the nominal rate of interest. e. adjusted for changes in the real rate of interest.
Scarcity:
a. exists because resources are unlimited while human wants are limited. b. means we are unable to have as much as we would like to have. c. will likely be eliminated as technology continues to expand. d. is not an issue addressed in economics.
Which of the following statements about the foreign exchange market is not true?
a. The exchange rate setting depends on the exchange rate regime a nation chooses. b. When a central bank intervenes in the foreign exchange market, it also affects the nation's monetary base. c. The elasticities of an economy's supply and demand for foreign exchange determine the exchange rate volatility. d. Flexible exchange rates increase the business risks associated with exchange rate movements. e. Fixed exchange rates decrease the business risks associated with changes in a nation's money supply.