A price searcher faces the following demand curve: At $9, $8, $7, and $6, the quantity demanded is 10, 20, 30, and 40 units, respectively. If the firm's marginal cost is $70 at any level of output, it would maximize net revenues by
A) producing 10 units and charging $9.
B) producing 20 units and charging $8.
C) producing 30 units and charging $7.
D) producing 40 units and charging $6.
E) charging $70 plus markup.
B
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A) negative; illiquid and insolvent B) positive; illiquid and insolvent C) negative; insolvent but not necessarily illiquid D) positive; insolvent but not necessarily illiquid E) negative; illiquid but not necessarily insolvent
Using a graph, show a market equilibrium. Suppose the costs of inputs increase. How is this shown on the graph? Explain what is happening in the market
What will be an ideal response?