Spending a lot on advertising:
A. can act as a credible signal to consumers of high-quality products.
B. does not serve as a credible signal to consumers, since any producer can do it.
C. can act as a credible signal to producers to create high quality substitutes.
D. can act as a credible signal to consumers of low-quality products.
Answer: A
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The firm will do best if it produces that quantity of output for which
a. marginal cost equals average cost b. profit per unit is greatest c. marginal revenue equals total revenue d. marginal revenue equals marginal cost e. marginal revenue exceeds marginal cost
In the long run, a competitive market with 1,000 identical firms will experience an equilibrium price equal to the minimum of each firm's average total cost
a. True b. False Indicate whether the statement is true or false