A purely competitive firm's output is currently such that its marginal cost is $4 and marginal revenue is $5. Assuming profit maximization, the firm should:
A. Cut its price and raise its output
B. Raise its price and cut output
C. Leave price unchanged and raise output
D. Leave price unchanged and cut output
C. Leave price unchanged and raise output
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A firm in a perfectly competitive industry will maximize profits by adjusting
A) average total cost until it equals price. B) price until marginal revenue equals marginal cost. C) output until average revenue equals short-run average total cost. D) output until marginal cost equals marginal revenue. E) price until average revenue equals average total cost.
If two large firms from different industries merge,
a. industry concentration rises b. industry concentration falls c. the total assets of the top 200 firms in the country will stay the same d. industry concentration rises in one market and falls in the other e. industry concentration is not affected