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Author Question: Assume that price exceeds average variable cost over the relevant range of demand. If a ... (Read 70 times)

jrubin

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on: Jun 29, 2018
Assume that price exceeds average variable cost over the relevant range of demand.
 
  If a monopolistically competitive firm is producing at an output where marginal revenue is 111.11 and marginal cost is 118, then to maximize profits the firm should increase its output.

Question 2

If a perfectly competitive firm's price is above its average total cost, the firm
 
  A) is incurring a loss. B) should shut down. C) is earning a profit. D) is breaking even.
InMicro ¦ Hubbard, O'Brien ¦ 1st Edition
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Ahnyah

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Reply #1 on: Jun 29, 2018
Answer to Question 1

FALSE

Answer to Question 2

C


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