If the competitive firm maximizes profit by selecting labor rather than output, it will earn greater economic profit
Indicate whether the statement is true or false
False. Whether the firm maximizes profit by selecting output or labor, the resulting profit is the same. Since MC = w/MP, setting MC = p is the same as setting w = p ? MP.
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Prime Pharmaceuticals has developed a new asthma medicine, for which it has a patent. An inhaler can be produced at a constant marginal cost of $2/inhaler
The demand curve, marginal revenue curve, and marginal cost curve for this new asthma inhaler are in the figure above. With its patent giving it a monopoly for its new inhaler, if Prime Pharmaceuticals operates as a single-price monopoly, then there will be a deadweight loss equal to A) $24 million. B) zero. C) $16 million. D) $32 million.
What decisions must a firm make to maximize profit?
What will be an ideal response?