The preceding table gives monthly production information for Peter's Peanuts, a firm in a perfectly competitive industry. The market price of peanuts is $2.00 per pound. A worker costs $1,200 per month
How many workers does Peter hire to maximize his profit? A) zero
B) one
C) three
D) four
C
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Suppose that government decides to create a license for widget makers. Only licensed widget makers are allowed to produce widgets. Moreover, only half of the current widget producers are eligible to obtain the license. What will happen with the supply curve of widgets?
A) It will not change. B) It will shift to the left. C) It will shift to the right. D) It will slope downwards.
If a firm's demand curve slopes downward, the firm's
a. marginal revenue will rise as price is reduced b. marginal revenue will generally be less than price c. total revenue will decline continuously as price is reduced d. marginal revenue will always be greater than its demand e. average revenue will increase continuously as output increases