What is the profit maximizing (loss minimizing) quantity for the perfectly competitive firm to produce?
The profit maximizing (loss minimizing) quantity for any firm to produce exists at that output level in which marginal revenue equals marginal cost (MR = MC). For the perfectly competitive firm, price (P) equals marginal revenue. Therefore, the profit maximizing quantity for the perfectly competitive firm to produce exits at that output level where P = MC.
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Redistributing income from the rich to the poor creates inefficiency because
A) of wasteful expenditures by people receiving welfare grants. B) of the administrative costs to operate the government redistribution agencies. C) the redistribution creates an incentive to produce less output. D) Both answers B and C are correct. E) Both answers A and C are correct.
An economist has conducted extensive research and has found that Jones Cola is a substitute for Tucker Cola. Ceteris paribus, the price of Jones Cola increases. The impact on the demand curve for Tucker Cola is a(n):
a. increase in demand. b. decrease in demand. c. increase in quantity demanded. d. decrease in quantity demanded.