Author Question: Assume that price exceeds average variable cost over the relevant range of demand. If a ... (Read 60 times)

jrubin

  • Hero Member
  • *****
  • Posts: 552
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.


Ahnyah

  • Sr. Member
  • ****
  • Posts: 336
Answer to Question 1

FALSE

Answer to Question 2

C



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

Long-term mental and physical effects from substance abuse include: paranoia, psychosis, immune deficiencies, and organ damage.

Did you know?

In the United States, there is a birth every 8 seconds, according to the U.S. Census Bureau's Population Clock.

Did you know?

Side effects from substance abuse include nausea, dehydration, reduced productivitiy, and dependence. Though these effects usually worsen over time, the constant need for the substance often overcomes rational thinking.

Did you know?

Approximately 500,000 babies are born each year in the United States to teenage mothers.

Did you know?

Individuals are never “cured” of addictions. Instead, they learn how to manage their disease to lead healthy, balanced lives.

For a complete list of videos, visit our video library