Figure 8-5 -If the Marginal Profit from Increasing Output by One Unit

question 27

Multiple Choice

Figure 8-5
-If the marginal profit from increasing output by one unit is negative, then to attain an optimum, the firm should

• A)increase output until marginal profit equals zero.
• B)reduce output until marginal profit equals zero.
• C)increase output until marginal profit is maximized.
• D)reduce output until marginal profit is maximized.

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Definitions:

Private Sector

The part of an economy that is owned and operated by private individuals and businesses, as opposed to the government.

Public Sector

The part of the economy that is controlled by the government, including various public services and enterprises.

Majority Voting

A process of making decisions in which the choice that secures a majority of the votes over 50% is selected.