# The marginal cost of alexas guide to street people

• Notes
• 28
• 90% (31) 28 out of 31 people found this document helpful

This preview shows pages 17–19. Sign up to view the full content.

125. The marginal cost of Alexa’s  Guide to Street People and Their Pets  is constant at \$5. Alexa sells  5,000 copies per year at \$20 per copy. She would like to increase readership and hold total profit  constant. If the price goes to \$15, how many copies must she sell? a. 10,000 b. 9,000 D,A c. 7,500 d. 6,000 126. Thomas Edison once complained that he was not making a profit selling light bulbs because his  plants were operating 25 percent below capacity. He estimated that he could increase output 25  percent with a 2 percent increase in the cost of production. He sold the 25 percent on the foreign  market at a price below what he called the “cost of production.” We can deduce that Edison really  meant D,I 127. A profit-maximizing firm always M,R d. produces every unit of output for which MR > MC. 128. If output is increased beyond the point where total profit is maximized, E,A 129. Total profit is maximized where a. MR = MC. b. marginal profit is zero. c. the slope of the marginal profit curve is zero. M,I d. All of the above are correct.

This preview has intentionally blurred sections. Sign up to view the full version.

248 Chapter 7/Output, Price, and Profit: The Importance of Marginal Analysis 130. When marginal cost exceeds marginal revenue, M,A a. marginal profit < 0. b. the firm should increase output. c. marginal profit + marginal cost > marginal revenue. d. marginal cost < marginal revenue – marginal profit. GENERALIZATION: THE LOGIC OF MARGINAL ANALYSIS AND MAXIMIZATION 131. What decision rule should be followed to maximize the net benefit of some variable? E,R
This is the end of the preview. Sign up to access the rest of the document.
• Fall '98
• Baim
• Microeconomics, Austrian School, Neoclassical economics, Marginalism

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern