Refer to the table. If each of the 100 firms in the industry is maximizing its profit, each must have a marginal cost of:

An efficient allocation of resources is demonstrated by a point

a. above the production possibilities frontier. b. below the production possibilities frontier. c. on the production possibilities frontier. d. near the middle of the production possibilities frontier.

A firm is operating with an optimal combination of inputs. Suddenly the price of one input rises. The firm should

a. buy less of that input and more of the other input. b. change its input mix so that the marginal physical product of the input whose price has risen falls and the marginal physical product of the other input rises. c. buy less of whichever input now has the highest money price and more of the other input. d. reduce its output.