If AC < p where MR = MC
A) firms earn positive profits and new firms will enter.
B) firms earn negative profits and existing firms will leave.
C) firms earn zero profits and new firms will not enter and no existing firms will leave.
D) None of the above.
A
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A monopoly firm operating with no trade will produce the profit-maximizing quantity where:
a. the firm's MC = MR, where MR is declining and below price. b. MR begins to increase and MC begins to decrease. c. P = MC. d. the firm's MC = MR, where MR is declining and equal to price.
Refer to Figure 18-7. The second lowest 20 percent of households
A) earn 12 percent of the society's total income. B) earn 16 percent of the society's total income. C) earn 28 percent of the society's total income. D) earn 40 percent of the society's total income.