Author Question: If a perfectly competitive firm finds that it is producing an amount of output such that MR > MC ... (Read 143 times)

asmith134 · **on:** Jun 29, 2018

If a perfectly competitive firm finds that it is producing an amount of output such that MR > MC and P > AVC, it will

A) leave the industry.
B) decrease its output.
C) increase its output.
D) not change its behavior.

Question 2

At the utility maximizing equilibrium for two goods, X and Y, which of the following must be TRUE?

A) The marginal utility per dollar spent on X will exceed the marginal utility per dollar spent on Y.
B) The total expenditure will be the same for each good.
C) The marginal utility per dollar from X equals the marginal utility per dollar from Y.
D) The marginal utility will be the same for each good.