Now suppose a decrease in the demand for tomatoes brings the market price down to $15. How many tomatoes should be produced in order to maximize profit?
Oscar sells bicycles in a perfectly competitive market. In the short run, at the quantity that equates marginal revenue and marginal cost, the market price is above Oscar’s average variable cost and below his average total cost. Oscar should
Tia sells hats in a perfectly competitive market. If, in the long run, the market price exceeds the minimum of Tia’s average variable cost but is below the minimum of her average total cost, Tia should
If a regulatory commission wants to ensure that a monopolist produces the largest quantity of output that is consistent with earning a normal profit, it will require the monopolist to charge a price equal to its