Suppose Jason owns a small pastry shop. Jason wants to maximize his profit, and thinking back to the microeconomics class he took in college, he decides he needs to produce a quantity of pastries which will minimize his average total cost.
Will Jason's strategy necessarily maximize profits for his pastry shop?
A) No; In order to maximize profit, Jason would never want to produce the quantity where average total cost is minimized.
B) Yes; Since Jason's pastry shop is in a perfectly competitive market, the only way to maximize profit is to produce the quantity where average total cost is minimized.
C) Not necessarily; Depending on demand, Jason may maximize profit by producing a quantity other than that where average total cost is at a minimum.
D) Not necessarily; This strategy will only maximize Jason's profit in the long run, but not in the short run.
Question 2
Refer to Figure 12-2. Why is the total revenue curve a ray from the origin?
A) because the firm can sell its product at a constant price
B) because revenue increases at a decreasing rate
C) because the firm must lower its price to sell more
D) because revenue increases at an increasing rate
Information flows from the nucleus to the cytoplasm and back.
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Thinking about Past Experiences While Asleep
General Andrew Jackson, on the horse, exhorts his men to throw back the advancing British; they succ
Jacob Lawrence, Barber Shop.
The energy set-point view that is the basis of many people’s thinking about hunger and eating.