A profit-maximizing monopolist will produce the level of output at which
a. average revenue is equal to average total cost.
b. average revenue is equal to marginal cost.
c. marginal revenue is equal to marginal cost.
d. total revenue is equal to opportunity cost.
c
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When investment increases, the multiplier points out that
A) consumption decreases by a greater amount. B) consumption increases by the same amount. C) real GDP increases by a greater amount. D) ultimately investment increases by more than the initial increase. E) real GDP decreases by a greater amount.
According to classical economists, the increase in unemployment in recessions is caused by
A) slack aggregate demand. B) the failure of wages to adjust to restore equilibrium in the labor market. C) the power of labor unions, which prevent firms from cutting wages. D) a mismatch of workers and jobs.