A picture frame company operates in a monopolistically competitive market. Its short-run equilibrium price is $80 and its ATC is $65 . It sells 100 picture frames a week. From this we can tell:
a. this firm is making a normal profit.
b. other picture frame companies will want to exit the market.
c. there are no other picture frame companies in the area.
d. economic profits are $1,500.
e. total profits are being maximized.
d
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Congress and the President passed a national health care policy. This is an example of
A) increasing the marginal cost of health care. B) the government using economic tools to make policy decisions. C) increasing the marginal benefit of health care. D) normative versus positive economics. E) answering the "how" question.
Marginal revenue product is:
a. defined as the amount that an additional unit of the variable input adds to the total revenue b. equal to the marginal factor cost of the variable factor times the marginal revenue resulting from the increase in output obtained c. equal to the marginal product of the variable factor times the marginal product resulting from the increase in output obtained d. a and b e. a and c