A rational seller will sell another unit of output:
A. as long as the quantity demanded is greater than zero.
B. whenever the seller is earning a profit.
C. if the seller can charge more than the equilibrium price.
D. if the cost of making another unit is less than the revenue gained from selling another unit.
Answer: D
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When the average total cost is at its minimum, it is:
a. equal to average variable cost. b. greater than marginal cost. c. equal to average fixed cost. d. equal to marginal cost. e. less than marginal cost.
The interest-rate risk that is associated with bond investing:
A. can be eliminated by holding only consols. B. arises because of a mismatch between the investor's investment horizon and the maturity of the bond. C. exists even if an investor plans on holding the bond to maturity. D. is not reflected in the risk premium.