The figure above shows a firm in a perfectly competitive market. If the price rises from P3 to P4 then output will increase by

Is a firm economically inefficient if it can cut its costs by producing less? Why or why not?

What will be an ideal response?

Which of the following both make the interest rate on a bond higher than otherwise?

a. the interest it pays is taxed and it was issued by a financially strong corporation b. the interest it pays is taxed and it was issued by a financially weak corporation c. the interest it pays is tax exempt and it was issued by a financially strong corporation d. the interest it pays is tax exempt and it was issued by a financially weak corporation