For a firm in a perfectly competitive market, if it produces where marginal cost exceeds marginal revenue it:
A. is impossible to tell if it is actually maximizing profits.
B. should increase production to increase profits.
C. should cut back production to increase profits.
D. is producing a profit-maximizing quantity.
Answer: C
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Cost-push inflation occurs
A) when the aggregate supply curve shifts to the left, while aggregate demand remains stable. B) when the aggregate demand curve shifts to the left, while aggregate supply remains stable. C) when the aggregate supply curve shifts to the right, while aggregate demand remains stable. D) when the aggregate demand curve shifts to the right, while aggregate supply remains stable.
According to the kinked demand curve model, regardless of whether a firm increases or decreases price, its total revenues will decrease as a result of the price change
Indicate whether the statement is true or false
The United States is the world's leading grain-producing nation. Exporting grain causes the: a. domestic consumption of grain to rise because of the added foreign demand
b. price of grain in the domestic market to fall because foreigners are now taking some of the domestic demand. c. price of grain to domestic consumers to rise because of the added foreign demand. d. standard of living of foreigners to fall because of the lost purchasing power.
Consider the production possibilities frontier displayed in the figure shown. A society should choose to produce:
A. at any point on the frontier rather than inside it. B. at any point that produce some of each good. C. at point C because it is the safest. D. at point B because it represents the most the society can produce.