For a perfectly competitive firm, which of the following is not true at profit maximization?
A) Marginal revenue equals marginal cost. B) Price equals marginal cost.
C) Market price is greater than marginal cost. D) Total revenue minus total cost is maximized.
C
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A good economic theory is always more useful when it includes detailed facts, even if the facts are not relevant to the questions being investigated
a. True b. False Indicate whether the statement is true or false
Answer the next question based on the following payoff matrix for a duopoly. The numbers indicate the profit in thousands of dollars for a high-price or a low-price strategy. Firm X? High PriceLow PriceFirm YHigh priceX = $625X = $725??Y = $625Y = $475?Low priceX = $475X = $400??Y = $725Y = $400Refer to the above payoff matrix. If both firms operate independently and do not collude, the most likely profit is:
A. $725,000 for firm X and $475,000 for firm Y. B. $400,000 for firm X and $400,000 for firm Y. C. $625,000 for firm X and $625,000 for firm Y. D. $475,000 for firm X and $725,000 for firm Y.