To maximize total surplus with a monopoly firm, a benevolent social planner would choose the level of output where
a. MR = MC.
b. MR intersects the demand curve.
c. MC intersects the demand curve.
d. MR exceeds MC by the greatest amount.
c
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When analyzing the effects of changes in demand in an open economy, we assume that firms:
a. have only one fixed rate of return on various projects when deciding investment activity. b. have differing returns on various projects when deciding investment activity. c. are required to borrow only from domestic banks when funding investment activity. d. consider the effects of inflation on investment activity.
Three accountants can prepare 5 tax returns a day and four accountants can prepare 7 tax returns a day. If the marginal revenue product of hiring the fourth accountant is $300, then in a perfectly competitive product market the price of each tax return is
a. $250 b. $100 c. $300 d. $200 e. $150