If a profit-maximizing firm finds that price exceeds average variable cost and that marginal revenue exceeds marginal cost, it should:
A) reduce output but continue producing in the short run.
B) increase its output.
C) shut down.
D) not alter its production level since it is earning a profit.
E) increase the price of its product.
Correct Answer:
Verified
Q43: Figure 7-2 shows the relationship among the
Q44: A price-taking firm will tend to expand
Q45: If a profit-maximizing firm finds that price
Q46: The marginal revenue for a perfectly competitive
Q47: Figure 7-4 shows the relationship among the
Q49: Table 7-1 shows revenue and cost data
Q50: If the market demand curve in a
Q51: Refer to Figure 7-1. Graphs A and
Q52: Marginal revenue is:
A)the additional cost incurred from
Q53: In the short run, a perfectly competitive
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