If a profit-maximizing firm finds that price exceeds average ...

[Chelseaamend]

If a profit-maximizing firm finds that price exceeds average variable cost and marginal cost is greater than marginal revenue, it should:
 a. reduce output, but continue producing in the short run.
  b. increase output.
 c. shut down.
 d. not alter its production level since it is earning a profit.

Question 2

Assume that any given percentage of the population earns an equal percentage of real GDP. This percentage of population will be represented by:
 a. a point below the line of income equality.
  b. a line lying below the line of income equality.
  c. a point on the line of income equality.
  d. a line lying above the line of income equality.
  e. a point above the line of income equality.

[Pamela.irrgang@yahoo.com]

Answer to Question 1

a

Answer to Question 2

c