If a firm is a price taker and wants to earn as much profit as possible, it should expand output
a. to the quantity at which marginal cost is minimized.
b. as long as marginal cost is less than price.
c. to the quantity at which average total costs are minimized.
d. to try to sell all the output it can produce so that its average fixed costs will be minimized.
B
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The demand curve for a monopoly is
A) horizontal because the demand is perfectly elastic. B) downward sloping. C) vertical because the demand is perfectly inelastic. D) upward sloping. E) undefined because it is the only supplier in the market.
Mike has just been laid off from his construction job because consumers are not purchasing new homes because of the recession. Mike would be considered to be part of
A) structural unemployment. B) cyclical unemployment. C) seasonal unemployment. D) frictional unemployment.
What are the distinguishing characteristics of monopolistic competition?
What will be an ideal response?
Which of the following will increase the money supply?
A) increasing the required reserve ratio B) an open market sale C) raising the discount rate relative to the federal funds rate D) none of the above