Jane's Copy Services is in perfect competition. Jane currently charges 10 cents per page, which is the going market price
Jane thinks that she can increase her profit if she lowers her price to 8 cents per page to increase the demand for her service. Is Jane right? Why or why not?
If Jane lowers her price, her profit will not increase. As a perfectly competitive firm, Jane can sell as much of her service as she wants at the going market price. And to maximize her profit, she should choose the quantity at which her marginal cost equals the market price. If Jane lowers the price, her total revenue, and hence profit, will fall.
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Explain the lingering effects of colonialism and how it is still playing a role in hindering economic development in the developing world
What will be an ideal response?
A major hurricane causes production problems in Gulf Coast region of the United States. This would cause
A) the short-run aggregate supply curve to shift to the left, but there would be no effect on the long-run aggregate supply curve. B) the short-run aggregate supply curve to shift to the left, and the long-run aggregate supply curve would shift to the right. C) both the short-run and the long-run aggregate supply curves to shift to the right in equal amounts. D) both the short-run and the long-run aggregate supply curves to shift to the left, but the long-run aggregate supply curve would shift more than the short-run curve.