A profit-maximizing firm will produce the level of output at which:
a. average revenue equals average cost.
b. average revenue equals average variable cost.
c. marginal revenue equals marginal cost.
d. marginal cost equals average revenue.
e. marginal revenue exceeds marginal cost by the maximum amount.
c
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The substitution effect that occurs when interest rates change involves a change in consumption that develops from ________
A) a change in the general level of prices B) a period of increasing productivity C) a change in the level of income D) a change in the relative prices of consumption in the two periods
Physicians who own their own diagnostic testing facilities tend to order more tests, charge higher fees for them, and have higher total bills to patients. This practice of self-referral is an example of
a. moral hazard. b. adverse selection. c. resipsaloquitor. d. physician-induced demand. e. cognitive dissonance.