To earn the greatest possible profit, a firm must:
A. maximize revenue less cost.
B. minimize revenue less cost.
C. maximize quantity at any price.
D. maximize price at any quantity.
A. maximize revenue less cost.
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When the firm produces zero output, its fixed cost is
a. zero b. the same as its total cost c. the same as its variable cost d. the same as its marginal cost e. infinite
The empirical evidence on purchasing power parity seems to point out that:
A. purchasing power parity does a good job of explaining short-run movements in exchange rates, but does not hold up to scrutiny over the long run. B. inflation and a country's rate of currency appreciation are positively correlated. C. purchasing power parity is a good theory for international trade, but is of little use in explaining exchange rate movements. D. purchasing power parity can explain long run movements in exchange rates but does not hold up to scrutiny for short-run changes.
Which of the following factors would indicate an inelastic demand?
A. The good is a necessity, rather than a luxury. B. The good represents a small fraction of the budget. C. Demand is measured over a shorter period of time. D. All of these
One of the most widely followed stock indexes in the United States is the Dow Jones Industrial Average. This index represents
A) the stock prices of 500 large U.S. firms. B) an over-the-counter market. C) the stock prices of more than 4,000 U.S. firms. D) the stock prices of 30 large U.S. corporations.