Which of the following is true
a. Increasing output always leads to increase in profits
b. Increasing outputs increase profits if price is above marginal cost
c. Increasing output increases profits if price is lea than marginal costs
d. Increasing output always decreases profits
b
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Refer to above figure. Two countries exist in this model, P and R. P is relatively labor (L) abundant, as is evident in the bottom right horizontal axis
If Country P were to be completely specialized in the labor-intensive product, C, it would be producing at point 4. In fact, it produces both C and P, at point 5. The (autarky) relative price of C (in terms of F) of Country P is at point 3; and of Country R at point 1. If trade were to open up between these two countries, which would export C and which would export F? Is this consistent with the Heckscher-Ohlin model? Explain.
If most passenger trains operate far below full capacity and demand is ____, reducing travel fares would be likely to increase total revenue
a. inelastic b. unit elastic c. unit inelastic d. elastic