If at an output of 4,000 units, Sloan Company is making an economic profit and marginal profit is $20 per unit, the firm should
A. reduce output to maximize total profit.
B. increase output until marginal profit falls to zero.
C. do whatever is necessary to increase marginal profit.
D. There is not enough information to make a decision.
Answer: B
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Which of the following does not occur in resolving a debt crisis?
A) Debts are restructured B) Repayment periods are shortened C) Interest rates are reduced D) Some partial debt forgiveness
Social costs of a good are equal to
A) external costs minus private costs. B) private costs minus external costs. C) private costs plus external costs. D) external costs divided by the private costs.
If the price falls and the total amount consumers spend on the good rises, then demand must be
A. elastic. B. perfectly elastic. C. perfectly inelastic. D. inelastic.
The price elasticity of demand for a popular sporting event is 2. If the price of a ticket to this event increases by 10 percent, the quantity of tickets demanded will:
A. Decrease by 5 percent B. Decrease by 20 percent C. Decrease by 10 percent D. Decrease by 0.2 percent