Which of the following conditions holds for a monopolist, but not for a perfect competitor, at the profit-maximizing level of output?
A) Price = average revenue.
B) Marginal revenue = marginal cost.
C) Price > marginal cost.
D) Profit = (AR-ATC) x Q.
C
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The market price for wallets is $20 . Your technology is such that at your most efficient production point, the average total cost of producing a wallet is $2.50 . Your manager runs into your office and shouts, "Boss! Average costs are rising! Average costs are rising!" To make a profit-maximizing decision, you should
a. definitely decrease production b. immediately stop production c. completely ignore your manager d. ask the manager about the marginal cost e. ask the manager about the average total cost
Sales taxes, property taxes, and value-added taxes are examples of indirect taxes
a. True b. False Indicate whether the statement is true or false