Pretty Polly produces dresses for little girls. At its current advertising level, Pretty Polly's marginal cost of advertising is $500,000 and their marginal benefit is $750,000. Which of the following is true?
A) If the firm increases the amount of advertising, its net profits will decrease.
B) The firm is currently maximizing its net profit.
C) The firm should increase the amount of advertising to increase its net profit.
D) The firm should reduce the amount of advertising to increase its net profit.
C) The firm should increase the amount of advertising to increase its net profit.
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In Exhibit 5-9, the price elasticity of supply for good X between points E and C is:
a. 7/5 = 1.40. b. 1/5 =0.20. c. 5/7 = 0.71. d. 1.
The statement, "Violent crime has decreased in the last five years," is:
a. obviously wrong and, therefore, cannot be a positive statement. b. normative since it can be answered by simply looking at the facts. c. positive because it is testable. d. not very interesting because all normative issues are of little importance.