A firm enjoys a positive economic profit when:
a. the demand curve touches the average cost curve at the profit-maximizing level of output.
b. the marginal revenue curve has a negative intercept on the ordinate axis.
c. the average revenue curve lies below the average cost curve at the profit-maximizing level of output.
d. the marginal cost is declining at the profit-maximizing level of output.
e. the average revenue curve lies above the average cost curve at the profit-maximizing level of output.
e
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Which of the following institutions within the Federal Reserve System determines how many government securities the Fed should buy or sell on a given day?
A) the Federal Reserve Bank of Chicago's Board of Trade. B) the Board of Governors. C) Federal Advisory Committee. D) the Federal Reserve Bank of New York's Trading Desk.
To deter a potential entrant, an existing firm in a market may threaten to sharply increase production so that the entrant will be left with a small share of the market. This may be a credible threat if:
A) production exhibits economies of scale. B) production exhibits diseconomies of scale. C) production costs may fall due to learning-by-doing. D) A and C are correct. E) B and C are correct.