If the Ford Motor Company Decides to Use More Robots

question 28

Multiple Choice

If the Ford Motor Company decides to use more robots in its manufacturing plants,the company is addressing the question of

• A) which goods and services should be produced with society's scarce resources
• B) what production methods should be used to produce goods and services
• C) how will output be allocated among the individuals in the society
• D) what prices will be charged for goods and services
• E) the optimal degree of central planning

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Definitions:

Profit-Maximizing

A strategy where a firm sets its production level to achieve the highest possible profit, where marginal cost equals marginal revenue.

Profit-Maximizing Monopolistically Competitive

A situation where a firm in a monopolistically competitive market sets its product prices and output levels to maximize its profits, recognizing it has some degree of market power.

MR = MC

An economic principle where a firm maximizes its profit when its Marginal Revenue equals Marginal Costs.

Marginal Revenue

The extra income obtained from the sale of an additional unit of a product or service.