At its present rate of output, Barrel O' Biscuits, a perfectly competitive firm, finds that its marginal cost exceeds its marginal revenue and price exceeds average variable cost. To maximize profit, the firm should
a. lower the price
b. raise the price
c. increase output
d. reduce output
e. maintain its current rate of output
D
Economics
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The aggregate demand curve in the figure above shifts rightward if
A) potential GDP increases. B) the money wage rate falls. C) taxes are raised. D) government expenditure increases. E) the Federal Reserve raises the interest rate.
Economics
Bailey's Barber Shop knows that a 5% increase in the price of their haircuts results in a 15% decrease in the number of haircuts purchased. What is the elasticity of demand facing Bailey's Barber Shop?
a. 0.05 b. 0.10 c. 0.33 d. 3.0
Economics