If the marginal cost for Dinky's Donuts to advertise one additional day each week in the local newspaper is $200, then Dinky's Donuts should advertize that additional day
A) until the marginal benefit the company receives reaches zero.
B) as long as the marginal benefit the company receives each week is just equal to or greater than $200.
C) as long as the weekly marginal cost does not rise.
D) only if the marginal benefit the company receives each week is greater than $200 plus an acceptable profit margin.
B
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The Laffer curve
A) initially slopes upward as increasing tax rates lead to increasing tax revenue but eventually will slope downward as increasing tax rates lead to decreasing tax revenue. B) slopes upward throughout its range since increasing tax rates will always lead to increases in tax revenue. C) is horizontal because tax revenue is independent of the rate of interest. D) slopes downward throughout its range since increasing tax rates will always lead to decreases in tax revenue.
The figure above shows a perfectly competitive firm. If the market price is $20 per unit, then the firm produces ________ units and makes an economic profit that is ________
A) more than 30; more than $100 B) 30; more than $100 C) 20; less than $400 D) 0; zero E) 30; zero