Firms maximize profit when
A) the additional benefit from producing a good equals the additional cost of producing that good.
B) MR = MC.
C) the derivative of the profit function with respect to output is zero.
D) All of the above.
D
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What will be an ideal response?
Suppose the market for hospital outpatient treatment is in equilibrium when a price ceiling is set below the equilibrium price. What do you expect to happen?
a. A surplus will develop. b. A shortage will develop. c. Quantity demanded will decrease. d. The number of outpatient visits will rise. e. The demand for outpatient procedures will fall.