A purely competitive firm's output is currently such that its marginal cost is $4 and marginal revenue is $5. Assuming profit maximization, the firm should:
A. Cut its price and raise its output
B. Raise its price and cut output
C. Leave price unchanged and raise output
D. Leave price unchanged and cut output
C. Leave price unchanged and raise output
You might also like to view...
What is the goal of monetary policy?
What will be an ideal response?
Keynesians tend to agree that during a depression:
A. governments should not do anything because anything they do will likely make the situation worse. B. decreasing government spending is likely to improve economic conditions. C. increasing taxes is likely to improve economic conditions. D. increasing government spending is likely to improve economic conditions.
The above figure shows the market for finish carpenters in Bozeman. There is a minimum wage set at $18
Compared to the initial equilibrium without the minimum wage, once the minimum wage is in place, and after taking account of job search, the total workers' surplus ________ and the total firms' surplus ________. A) decreases; increases B) increases; increases C) increases; decreases D) does not change; increases E) decreases; decreases
[NeedAttention]
Exhibit 35-1
?
