A perfect competitive firm maximizes profits by producing that output where P = MC. (Hint: consider the relationship between P and MR for a perfectly competitive firm).
a. true
b. false
Answer: a. true
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According to the traditional Keynesian approach, if the government increases spending by $5 million and raises current taxes by $5 million at the same time, then
A) real GDP will increase by $5 million. B) real GDP will decrease by $5 million. C) real GDP will decrease by more than $5 million. D) real GDP will remain the same.
In economic analysis, air pollution, water pollution, and scenery destruction are considered to be
A) externalities. B) internalities. C) private costs. D) marginal benefits.
A small increase in productivity growth can have a huge impact on a country's standard of living
a. True b. False Indicate whether the statement is true or false
In a natural monopoly,
a. society would be better off if antitrust laws were used to create many different firms in the market. b. the marginal cost curve is positively sloped. c. if the government requires marginal cost pricing, it will likely have to subsidize the firm. d. the marginal revenue curve is horizontal.