Economics - Economics Section 1
6. A firm’s profit is maximized when:
- Option : B
- Explanation : A firm’s profit is maximized when marginal revenue is equal to marginal cost.
- Option : B
- Explanation : The firm can hire two unskilled workers for 150 x 2 = 300 or one skilled worker for 280. The firm will minimize costs at the higher level of production by hiring one additional skilled worker at a total cost of 280.
- Option : B
- Explanation : In an oligopoly, we have relatively few sellers and the barriers to entry into or exit from the industry are high.
- Option : A
- Explanation : In monopolistic competition, we have many sellers, the products are differentiated and the advertising and marketing expenses are high.
10. Advertising is least likely used in a:
- Option : C
- Explanation : In perfect competition, the product cannot be differentiated by advertising or any other means.
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