The marginal approach to profit maximization means that a firm should produce until:
a. marginal revenue equals zero.
b. marginal revenue equals marginal cost.
c. marginal cost becomes negatively sloped.
d. marginal revenue equals price.
e. price equals average total cost.
Question 2
As cities prospered and per-capita incomes increased, the demand for bus travel diminished. This suggests that:
a. cities could raise revenue by increasing bus fares.
b. the demand for bus travel is price elastic.
c. bus travel and automobile travel are complements.
d. bus travel is an inferior good.
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