A firm is currently producing at the point where MC = MR. The situation for the firm at this point is P = $5, Q = 100, ATC = $6, AVC = $4.50. What do you recommend this firm do?
A) Increase production above the current output rate, because MC = MR at this rate of output.
B) Continue to produce the current output rate, because P > AVC.
C) Shut down, because AVC > P.
D) Shut down, because ATC > P.
B
Economics
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If interest rates rise, then velocity should ____ in the Keynesian model and _____ in the Monetarist model
a. rise; fall. b. stay the same, stay the same. c. rise, stay the same. d. fall; rise. e. none of the above
Economics
A piece of evidence in favor the Keynesian model would be that
a. investment is very sensitive to changes in tax rates. b. changes in aggregate income cause changes in investment, but not vice versa. c. the aggregate price level is negatively correlated with income. d. all of the above.
Economics