The candy store represented in the figure to the right is currently selling Qa units of candy at a price of Pa. Is this candy store maximizing its profit and if it is? not, what would you recommend to the? firm?
A) Yes, it is maximizing its profit by charging the highest price possible.
B) No, it is not; since its marginal cost is constant, it should produce and sell as much candy as it can. It should sell Qd units at a price of Pd.
C) No, it is not; it should lower its price to Pc and sell Qc units.
D) No, it is not; it should lower its price to Pb and sell Qb units.
Answer : D) No, it is not; it should lower its price to Pb and sell Qb units.
You might also like to view...
An agreement among countries about how relative currency values should be determined is known as
A) an exchange rate system. B) an international currency market. C) a free-trade arrangement. D) a parity intervention.
It takes Anne 3 hours to make a pie and 4 hours to make a shirt. It takes Mary 2 hours to make a pie and 5 hours to make a shirt. Anne should specialize in making shirts and Mary should specialize in making pies, and they should trade
a. True b. False Indicate whether the statement is true or false