Suppose a perfectly competitive firm can increase its profits by increasing its output. Then it must be true that the firm's:
a. marginal cost exceeds its marginal revenue.
b. price exceeds its average variable cost but is less than average total cost.
c. marginal revenue exceeds its marginal cost.
d. price exceeds its marginal revenue.
c. marginal revenue exceeds its marginal cost.
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If producers have an expectation of higher future prices, the supply of the good that is currently available
A) will be all that is produced. B) will decrease. C) will not change. D) will increase.
The President proposes a reduction of personal income marginal tax rates in the United States. When marginal tax rates are reduced, there is
A) a decrease in the magnitude of the expenditure multiplier. B) an increase in the magnitude of the expenditure multiplier. C) a decrease in the marginal propensity to consume. D) no change in the slope of the AE line. E) an increase in the marginal propensity to consume.