In the above figure, if the price is $8 per unit, how many units will a profit maximizing perfectly competitive firm produce?
A) 5
B) 20
C) 30
D) 35
B
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Under the rational expectations hypothesis, which of the following is the most likely short-run effect of a move to expansionary monetary policy?
A. a higher general level of prices but no change in real output B. a higher general level of prices and an expansion in real output C. no change in the general level of prices and a reduction in real output D. no change in either the general level of prices or real output
In an open economy with flexible exchange rates, monetary policy affects consumption and investment by changing the ________ and affects net exports by changing the ________.
A. real interest rate; exchange rate B. exchange rate; real interest rate C. growth of domestic real GDP; growth of foreign real GDP D. inflation rate; unemployment rate