In the long run, under conditions of perfect competition, market forces come into play to
a. enhance profits.
b. increase demand.
c. eliminate profits.
d. separate MR and AR.
c. eliminate profits.
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If a monopolist's price is $50 per unit and its marginal cost is $25, then
A) to maximize profit the firm should continue to produce the output it is producing. B) to maximize profit the firm should decrease output. C) to maximize profit the firm should increase output. D) Not enough information is given to say what the firm should do to maximize profit.
Answer the following statements true (T) or false (F)
1) When making output decisions, managers of firms producing a joint product with fixed proportions need to pay attention to the separate prices of the joint goods. 2) If a firm is producing a joint product with variable proportions, if the price of one of the joint products changes, to maximize profits, managers must adjust both the total production of the jointly produced product and the products' proportions. 3) If a firm is producing a joint product and the price of one of the products increases, the marginal benefit of producing more of that product increases. 4) If a firm is producing a joint product with variable proportions, producing more of one product means producing more of the other product. 5) Because the decision involves the production of two goods, marginal analysis cannot be used to determine the profit-maximizing proportions of jointly produced products.
Which of the following might cause a market to produce a quantity that is less than optimal?
a. A price ceiling above the market equilibrium price. b. Market control by a monopolist. c. A subsidy to low-income consumers. d. None of the above.
Consumer loyalty tends to be very low in markets such as cola drinks and tobacco products
a. True b. False Indicate whether the statement is true or false