Profit-maximizing firms in a competitive market produce an output level where
a. marginal cost equals marginal revenue.
b. marginal cost equals average total cost.
c. marginal revenue is increasing.
d. price is less than marginal revenue.
a
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Refer to Figure 14-2. Now suppose that the government delays Xenophone's entry and Gigacom moves first, what is the likely outcome in the market?
A) Both offer DSL internet service; Xenophone earns a profit of $8 million and Gigacom earns a profit of $7 million. B) Xenophone offers internet service via cable line and earns a profit of $4 million while Gigacom offers DSL internet service and earns a profit of $4.5 million. C) Xenophone offers DSL internet service and earns a profit of $5 million while Gigacom offer internet service via cable line and earns a profit of $6.5 million. D) Both offer internet service via cable line; Xenophone earns a profit of $6 million and Gigacom earns a profit of $9 million.
A perfect-price-discriminating equilibrium maximizes
A) consumer surplus. B) the associated deadweight loss. C) the market inefficiency. D) total welfare.