For a perfectly competitive firm, profit maximization occurs when
A. marginal revenue equals marginal cost.
B. marginal revenue equals average total cost.
C. marginal cost is equal to average total cost.
D. average total cost is at its minimum.
Answer: A
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Consider the following statement, "The Federal Reserve fights recessions by increasing the money supply so people will have more money to spend." What is wrong with the statement and how can it be corrected?
What will be an ideal response?
Other things being equal, how would the market for bicycles be affected by an increase in the availability and number of bicycle paths?
a. An increase in prices and a decrease in the quantity exchanged b. An increase in prices and an increase in the quantity exchanged c. A decrease in prices and a decrease in the quantity exchanged d. A decrease in prices and an increase in the quantity exchanged