Refer to the data. If the firm's minimum average variable cost is $10, the firm's profit- maximizing level of output would be:
A. 2.
B. 3.
C. 4.
D. 5.
B. 3.
You might also like to view...
Currently, the U.S. national debt is more than $20 trillion
a. True b. False Indicate whether the statement is true or false
If resource prices are fixed and the product selling price rises, then
a. profits will decrease. b. profits will increase. c. profits will remain constant. d. both profits and output will decrease.
When demand is inelastic,
A. selling one more unit of output causes marginal revenue to increase. B. the percentage change in quantity demanded will exceed the percentage change in price (in absolute value). C. quantity sold does not increase when price decreases. D. buyers are not very responsive to changes in the price of the product. E. selling one more unit of output cause total revenue to increase.
A firm sells a product in a perfectly competitive market. The marginal cost of the product at the current output level of 1,000 units is $2.50. The minimum possible average variable cost is $2. The market price of the product is $2.50. To maximize profits, the firm should
A. increase production to more than 1,000 units. B. decrease production to less than 1,000 units. C. continue producing 1,000 units. D. shut down.