As long as price is greater than average variable cost, a firm maximizes its profit by producing that quantity of output for which
a. average revenue equals average total cost
b. the price is the highest
c. marginal revenue equals marginal cost
d. average total cost is minimized
e. average variable cost is minimized
C
You might also like to view...
The substitution effect causes a consumer to buy less of a product when its price rises because the:
A) consumer's real income has decreased. B) consumer's real income has increased. C) product is now less expensive compared to other products. D) product is now more expensive compared to other products.
Suppose that one year ago you purchased a $1,000 bond with an interest payment of $40 per year and, at the time, the interest rate was 4 percent. One year later the interest rate on bonds has increased to 5 percent, and you still hold the bond you purchased a year ago. If you were to sell your bond now, the price that you could sell it for would be
A) higher than it was when you bought it. B) lower than it was when you bought it. C) the same as it was when you bought it, that is, $1,000. D) lower or higher than it was when you bought it, but we cannot determine which.