Suppose a perfectly competitive firm faces the following short-run cost and revenue conditions: ATC = $8.00; AVC = $5.00; MC = $8.00; MR = $7.00. The firm should
A) increase output.
B) decrease output.
C) increase price.
D) continue to produce its current output.
Answer: B
Economics
You might also like to view...
What is meant by "tax incidence"?
What will be an ideal response?
Economics
Which of the following is likely to occur when it is known that a two-person game is to be played only once?
a. Collusion b. The demand curve becomes perfectly inelastic for this time period c. The prisoner's dilemma d. The pursuit of profit maximization for the entire industry e. An attempt to equate marginal revenue with marginal cost
Economics