This topic contains a solution. Click here to go to the answer

Author Question: Suppose a company increases production from a point where marginal cost equals average total cost to ... (Read 134 times)

P68T

  • Hero Member
  • *****
  • Posts: 509
Suppose a company increases production from a point where marginal cost equals average total cost to a point where marginal revenue and marginal cost are equal. Is it a good idea for the company to do this? Why?
 a. No, average total costs have increased which means the company is not minimizing losses.
  b. Yes, because average variable costs are always less than average total costs.
  c. No, because the marginal cost of producing the last unit is the same as the marginal revenue.
  d. Yes, even though the previous level of output had minimized the average total cost, there was still profit to be earned by producing additional units.
  e. No, the previous level of output was the most efficient because it had the lowest average total cost.

Question 2

If a tripling of price triples the quantity of a good supplied, the price elasticity of supply for this good is:
 a. 3.
  b. 300.
  c. 1.
  d. 1.
  e. 3.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

kishoreddi

  • Sr. Member
  • ****
  • Posts: 329
    • Your online Help in Biology and chemistry
Answer to Question 1

d

Answer to Question 2

c




P68T

  • Member
  • Posts: 509
Reply 2 on: Jun 30, 2018
YES! Correct, THANKS for helping me on my review


amynguyen1221

  • Member
  • Posts: 355
Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

 

Did you know?

Not getting enough sleep can greatly weaken the immune system. Lack of sleep makes you more likely to catch a cold, or more difficult to fight off an infection.

Did you know?

In Eastern Europe and Russia, interferon is administered intranasally in varied doses for the common cold and influenza. It is claimed that this treatment can lower the risk of infection by as much as 60–70%.

Did you know?

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

Did you know?

Amoebae are the simplest type of protozoans, and are characterized by a feeding and dividing trophozoite stage that moves by temporary extensions called pseudopodia or false feet.

Did you know?

IgA antibodies protect body surfaces exposed to outside foreign substances. IgG antibodies are found in all body fluids. IgM antibodies are the first type of antibody made in response to an infection. IgE antibody levels are often high in people with allergies. IgD antibodies are found in tissues lining the abdomen and chest.

For a complete list of videos, visit our video library