Exhibit 7-9 A firm's cost and marginal revenue curves
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In Exhibit 7-9, product price in this market is fixed at $7. This firm is currently operating where MR = MC. What do you advise this firm to do?
A. This firm should shut down.
B. This firm could increase profits by increasing output.
C. This firm could increase profits by decreasing output.
D. This firm should increase price.
Answer: A
Economics
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A 20 percent increase in the quantity of pizza demanded results from a 10 percent decline in its price. The price elasticity of demand for pizza is
A) 0.5. B) 2.0. C) 10.0. D) 20.0.
Economics
The income elasticity of demand for housing property is exactly 1.40 . Due to a recession, you expect incomes to drop by 5% next year. How will consumers adjust their purchase for housing property?
a. Buy 5% more houses b. Buy 5% fewer houses c. Buy 7% more houses d. Buy 7% fewer houses
Economics