Author Question: Martha's Cleaning Services is a perfectly competitive firm that currently cleans 30 offices a week ... (Read 52 times)

imanialler · **on:** Jun 29, 2018

Martha's Cleaning Services is a perfectly competitive firm that currently cleans 30 offices a week and charges 20 per office, which is the going market price. Martha's marginal cost is 15.

What should Martha do to increase her economic profit? Clean more offices? Raise her price? Explain your answer.

Question 2

Social Security is an example of

A) a progressive income tax.
B) a subsidized service.
C) an income maintenance program.
D) an unemployment benefit.

dreamfighter72 · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

Martha should increase the number of offices she cleans until her marginal cost equals the market price. This way she will maximize her profit. As a perfectly competitive firm, Martha is a price taker and cannot raise or lower her price without losing profit.

Answer to Question 2

C