A firm seeking to maximize economic profits should produce at the output at which
A. total revenue equals total cost.
B. marginal revenue equals average revenue.
C. marginal revenue equals marginal cost.
D. average revenue equals average cost.
Answer: C
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The social interest theory of regulation is defined as the
A) use of regulations to maximize firms' profits. B) use of regulations to assure an efficient use of resources. C) removal of regulations on business activities. D) implementation and removal of regulations on the cable TV industry. E) use of rate of return regulation.
An opportunity cost of economic growth is
A) essentially zero because economic growth leads to such large gains in the long run. B) the decrease in production of consumption goods in the present time period. C) decreased by the creation of capital goods rather than consumption goods. D) so high that places such as Hong Kong have had to do without it.