MICROECONOMICS Georgia Standards of Excellence MICRO CONCEPT CLUSTER - - PowerPoint PPT Presentation
Domain 3 MICROECONOMICS Georgia Standards of Excellence MICRO CONCEPT CLUSTER SSEMI1 SSEMI1 Describe how households and businesses are interdependent and interact through flows of goods, services, resources, and money. a. Illustrate a circular
SSEMI1 SSEMI1 Describe how households and businesses are interdependent and interact through flows of goods, services, resources, and money.
market, the resource (factor) market, households, and firms.
money between and among households and firms.
PRODUCCR
PRODUCT MARKET FACTOR MARKET
HOUSEHOLDS
BUSINESSES
Payments Money Money Payments Service & Goods Services & Goods Factors of Production Factors of Production Income & Wages Wages Income &
Own all of the factors of production. BUY in the Product Market & SELL in the Factor Market. BUY in the Factor Market & SELL in the Product Market.
PRODUCCR
PRODUCT MARKET FACTOR MARKET
HOUSEHOLDS
BUSINESSES
Payments Money Money Payments Service & Goods Services & Goods Factors of Production Factors of Production Income & Wages Wages Income &
Own all of the factors of production. BUY in the Product Market & SELL in the Factor Market. BUY in the Factor Market & SELL in the Product Market.
GOVERNMENT
Taxes Taxes
Money Payments Factors of Production Money Payments Goods & Services
Public Goods & Services Public Goods & Services
PRODUCCR
PRODUCT MARKET FACTOR MARKET
HOUSEHOLDS
BUSINESSES
Payments Money Money Payments Service & Goods Services & Goods Factors of Production Factors of Production Income & Wages Wages Income &
GOVERNMENT
Taxes Taxes
Public Goods & Services
Money Payments Money Payments Goods & Services Factors of Production
Public Goods & Services
SSEMI3 Explain the organization and role of business and analyze the four types of market structure in the US economy.
Sole proprietorship Partnership Corporation
Monopoly Oligopoly Monopolistic competition Pure competition
A sole proprietorship is a business owned and managed by a single individual.
commercial enterprise. Sole proprietorships are the most common form of business organization and make up 72% of all U.S. firms.
generate only about 6 percent of all United States sales.
Ease of Start-Up
paperwork and legal expenses, just about anyone can start a sole proprietorship. Relatively Few Regulations
least-regulated form of business organization.
Sole Receiver of Profit
sole proprietorship keeps all the profits. Full Control
run their businesses as they wish. Easy to Discontinue
debt, no other legal obligations needed to be met to stop doing business.
Sole proprietorships offer their owners many advantages:
The biggest disadvantage of sole proprietorships is unlimited personal liability. Liability is the legally bound obligation to pay debts.
access to resources, such as physical capital. Human capital can also be limited, because no
retirement, or any other reason, the business ceases to exist.
(a) partnership. (b) business organization. (c) sole proprietorship. (d) corporation.
(a) are complicated to establish. (b) make up about 6 percent of all businesses. (c) are the most common form of business in the United States. (d) offer owners little control over operations.
(a) partnership. (b) business organization. (c) sole proprietorship. (d) corporation.
(a) are complicated to establish. (b) make up about 6 percent of all businesses. (c) are the most common form of business in the United States. (d) offer owners little control over operations.
Partnerships fall into three categories:
responsibility and liability.
general partner, or to have unlimited personal liability for the firm.
this form, all partners are limited partners.
Partnerships are easy to establish. There is no required partnership agreement, but it is recommended that partners develop articles of partnership.
In a successful partnership, each partner brings different strengths and skills to the business.
Each partner's assets, or money and other valuables, improve the firm's ability to borrow funds for operations or expansion.
Individual partners are subject to taxes, but the business itself does not have to pay taxes.
partner has unlimited liability.
ensure that they agree about work habits, goals, management styles, ethics, and general business philosophies.
(a) The responsibility for the business is shared. (b) The business is easy to start up. (c) The partners are not responsible for the business debts. (d) The business is easy to sell.
(a) Every partner shares equally in both responsibility and liability. (b) The doctors, lawyers, or accountants who form a general partnership hire
(c) No partner is responsible for the debts of the partnership beyond his or her investment. (d) Only one partner is responsible for the debts of the partnership.
(a) The responsibility for the business is shared. (b) The business is easy to start up. (c) The partners are not responsible for the business debts. (d) The business is easy to sell.
(a) Every partner shares equally in both responsibility and liability. (b) The doctors, lawyers, or accountants who form a general partnership hire
(c) No partner is responsible for the debts of the partnership beyond his or her investment. (d) Only one partner is responsible for the debts of the partnership.
stockholders.
corporation.
known as a closely held corporation.
market.
Advantages for the Stockholders
carry responsibility for the corporation’s actions.
transferable, which means that stockholders can sell their stock to others for money. Advantages for the Corporation
more growth than other business forms.
by selling bonds.
available labor to create and market the best services or goods possible.
Difficulty and Expense of Start-Up
Corporate charters can be expensive and time consuming to establish. A state license, known as a certificate of incorporation, must be obtained.
Double Taxation
Corporations must pay taxes on their income. Owners also pay taxes on dividends, or the portion of the corporate profits paid to them.
Loss of Control
Managers and boards of directors, not owners, manage corporations.
More Regulation
Corporations face more regulations than other kinds of business organizations.
Multinational corporations (MNCs) are large corporations headquartered in one country that have subsidiaries throughout the world.
Advantages of MNCs
consumers by offering products
new technologies and production methods across the globe. Disadvantages of MNCs
unduly influence culture and politics where they operate. Critics of multinationals are concerned about wages and working conditions provided by MNCs in foreign countries.
(a) the responsibility for the business is shared (b) capital is easier to raise than in other business forms (c) corporations face double taxation (d) corporations have more potential for growth
(a) Difficulty and Expense of Start-Up (b) Loss of Control (c) More Regulation (d) All of the Above
(a) the responsibility for the business is shared (b) capital is easier to raise than in other business forms (c) corporations face double taxation (d) corporations have more potential for growth
(a) Difficulty and Expense of Start-Up (b) Loss of Control (c) More Regulation (d) All of the Above
Perfect competition is a market structure in which a large number of firms all produce the same product.
There are many participants on both the buying and selling sides.
There are no differences between the products sold by different suppliers.
The market provides the buyer with full information about the product and its price.
Firms can enter the market when they can make money and leave it when they can't.
Factors that make it difficult for new firms to enter a market are called barriers to entry.
Start-up Costs
business must pay before the first product reaches the customer are called start-up costs. Technology
high degree of technological know-how. As a result, new entrepreneurs cannot easily enter these markets.
Market Equilibrium in Perfect Competition
Quantity Price
One of the primary characteristics of perfectly competitive markets is that they are efficient. In a perfectly competitive market, price and output reach their equilibrium levels.
Supply Demand Equilibrium Price Equilibrium Quantity
(a) many buyers and sellers participate (b) identical products are offered (c) market barriers are in place (d) buyers and sellers are well-informed about goods and services
(a) Each firm adjusts its output so that it just covers all of its costs. (b) Each firm makes its output as large as possible even though some goods are not sold. (c) Different firms make different amounts of goods, but some make a profit and others do not. (d) Different firms each strive to make more goods to capture more of the market.
(a) many buyers and sellers participate (b) identical products are offered (c) market barriers are in place (d) buyers and sellers are well-informed about goods and services
(a) Each firm adjusts its output so that it just covers all of its costs. (b) Each firm makes its output as large as possible even though some goods are not sold. (c) Different firms make different amounts of goods, but some make a profit and others do not. (d) Different firms each strive to make more goods to capture more of the market.
(a) many buyers and sellers participate (b) identical products are offered (c) market barriers are in place (d) buyers and sellers are well-informed about goods and services
(a) Each firm adjusts its output so that it just covers all of its costs. (b) Each firm makes its output as large as possible even though some goods are not sold. (c) Different firms make different amounts of goods, but some make a profit and others do not. (d) Different firms each strive to make more goods to capture more of the market.
that has a single supplier.
high prices.
Different market conditions can create different types of monopolies.
If a firm's start-up costs are high, and its average costs fall for each additional unit it produces, then it enjoys what economists call economies of scale. An industry that enjoys economies of scale can easily become a natural monopoly.
A natural monopoly is a market that runs most efficiently when
Sometimes the development of a new technology can destroy a natural monopoly.
A government monopoly is a monopoly created by the government.
a new product the exclusive right to sell it for a certain period of time.
goods within an exclusive market. A license is a government-issued right to operate a business.
companies in an industry to restrict the number of firms in the market.
Price discrimination is the division of customers into groups based on how much they will pay for a good.
discrimination is a feature
practiced by any company with market power. Market power is the ability to control prices and total market output.
student discounts and manufacturers’ rebate
price discrimination.
requires some market power, distinct customer groups, and difficult resale.
A monopolist sets output at a point where marginal revenue is equal to marginal cost.
Setting a Price in a Monopoly
Market Price $11 $3
Price
9,000
Output (in doses)
Marginal Cost Demand Marginal Revenue
B C A
choice – it can choose to set either
profits; therefore, compared with a perfectly competitive market, the monopolist produces fewer goods at a higher price.
perfect competition?
In monopolistic competition, many companies compete in an
As a rule, monopolistically competitive markets are not marked by economies of scale or high start-up costs, allowing more firms.
Entry Firms in a monopolistically competitive market do not face high barriers to entry.
Firms in a monopolistically competitive market have some freedom to raise prices because each firm's goods are a little different from everyone else's.
Firms have some control over their selling price because they can differentiate, or distinguish, their goods from other products in the market.
Nonprice competition is a way to attract customers through style, service, or location, but not a lower price.
The simplest way for a firm to distinguish its products is to
shape, texture, or taste.
A convenience store in the middle of the desert differentiates its product simply by selling it hundreds
nearest competitor.
Some sellers can charge higher prices because they offer customers a higher level of service.
Firms also use advertising to create apparent differences between their own offerings and
marketplace.
because firms have a small amount of power to raise prices.
short run, they have to work hard to keep their product distinct enough to stay ahead of their rivals.
average price due to the number of firms in the market. They do, however, offer a wide array of goods and services to consumers.
Oligopoly describes a market dominated by a few large, profitable firms.
Collusion
among members of an
production levels. Price- fixing is an agreement among firms to sell at the same or similar prices. Cartels
producers established to coordinate prices and production.
Comparison of Market Structures
Number of firms Variety of goods Control over prices Barriers to entry and exit Examples Perfect Competition Many None None None Wheat, shares of stock Monopolistic Competition Many Some Little Low Jeans, books Oligopoly Two to four dominate Some Some High Cars, movie studios Monopoly One None Complete Complete Public water
competition, monopolistic competition, oligopoly, and monopoly
1.The differences between perfect competition and monopolistic competition arise because (a) in perfect competition the prices are set by the government. (b) in perfect competition the buyer is free to buy from any seller he or she chooses. (c) in monopolistic competition there are fewer sellers and more buyers. (d) in monopolistic competition competitive firms sell goods that are similar enough to be substituted for one another. 2.An oligopoly is (a) an agreement among firms to charge one price for the same good. (b) a formal organization of producers that agree to coordinate price and output. (c) a way to attract customers without lowering price. (d) a market structure in which a few large firms dominate a market.
1.The differences between perfect competition and monopolistic competition arise because (a) in perfect competition the prices are set by the government. (b) in perfect competition the buyer is free to buy from any seller he or she chooses. (c) in monopolistic competition there are fewer sellers and more buyers. (d) in monopolistic competition competitive firms sell goods that are similar enough to be substituted for one another. 2.An oligopoly is (a) an agreement among firms to charge one price for the same good. (b) a formal organization of producers that agree to coordinate price and output. (c) a way to attract customers without lowering price. (d) a market structure in which a few large firms dominate a market.
protect competition?
Market power is the ability of a company to control prices and
few large firms tend to have higher prices and lower output than markets with many sellers.
firms sometimes use predatory pricing. Predatory pricing sets the market price below cost levels for the short term to drive out competitors.
Government policies keep firms from controlling the prices and supply of important goods. Antitrust laws are laws that encourage competition in the marketplace.
Practices The government has the power to regulate business practices if these practices give too much power to a company that already has few competitors.
The government has used anti-trust legislation to break up existing monopolies, such as the Standard Oil Trust and AT&T.
A merger is a combination of two or more companies into a single firm. The government can block mergers that would decrease competition.
In 1997, new guidelines were introduced for proposed mergers, giving companies an
merging benefits consumers.
Deregulation is the removal of some government controls over a market.
weeding out of some firms from that market, which can be hard on workers in the short term.
(a) regulate business practices (b) stop firms from forming monopolies (c) prevent firms from selling new experimental products (d) break up existing monopolies
(a) promote competition (b) promote government control (c) promote inefficient commerce (d) prevent monopolies
(a) regulate business practices (b) stop firms from forming monopolies (c) prevent firms from selling new experimental products (d) break up existing monopolies
(a) promote competition (b) promote government control (c) promote inefficient commerce (d) prevent monopolies
SSEMI2 Explain how the law of demand, the law of supply and prices work to determine production and distribution in a market economy.
https://youtu.be/RP0j3Lnlazs
The law of demand states that consumers buy more
when its price increases.
patterns that overlap, the substitution effect and the income effect.
can change his or her spending patterns for other goods.
The Substitution Effect
react to an increase in a good’s price by consuming less of that good and more of other goods. The Income Effect
when a person changes his
goods and services as a result of a change in real income.
Demand Schedules
Individual Demand Schedule
Price of a slice of pizza Quantity demanded per day
Market Demand Schedule
Price of a slice of pizza Quantity demanded per day $.50 $1.00 $1.50 $2.00 $2.50 $3.00 5 4 3 2 1 $.50 $1.00 $1.50 $2.00 $2.50 $3.00 300 250 200 150 100 50
the quantity of a good a person will buy at each different price.
that lists the quantity of a good all consumers in a market will buy at each different price.
Market Demand Curve
3.00 2.50 2.00 1.50 1.00 .50 50 100 150 200 250 300 350 Slices of pizza per day Price per slice (in dollars) Demand
graphical representation of a demand schedule.
demand curve, assume all outside factors, such as income, are held constant.
(a) consumers will buy more when a price increases. (b) price will not influence demand. (c) consumers will buy less when a price decreases. (d) consumers will buy more when a price decreases.
demand? (a) the prices of other goods drop (b) fewer goods are bought (c) more goods are bought (d) demand stays the same
(a) consumers will buy more when a price increases. (b) price will not influence demand. (c) consumers will buy less when a price decreases. (d) consumers will buy more when a price decreases.
demand? (a) the prices of other goods drop (b) fewer goods are bought (c) more goods are bought (d) demand stays the same
Price
As price increases…
Supply
Quantity supplied increases
Price
As price falls…
Supply
Quantity supplied falls
higher price.
good is offered for sale at a specific price.
firms to produce more.
supplied of a good.
$.50 1,000 Price per slice of pizza Slices supplied per day
Market Supply Schedule
$1.00 1,500 $1.50 2,000 $2.00 2,500 $2.50 3,000
suppliers will offer at different prices.
Market Supply Curve
Price (in dollars) Output (slices per day) 3.00 2.50 2.00 1.50 1.00 .50 500 1000 1500 2000 2500 3000 3500 Supply
(a) the lower the price, the larger the quantity supplied (b) the higher the price, the larger the quantity supplied (c) the higher the price, the smaller the quantity supplied (d) the lower the price, the more manufacturers will produce the good
produce… (a) less goods. (b) more goods. (c) the same quantity of goods. (d) different types of goods.
(a) the lower the price, the larger the quantity supplied (b) the higher the price, the larger the quantity supplied (c) the higher the price, the smaller the quantity supplied (d) the lower the price, the more manufacturers will produce the good
produce… (a) less goods. (b) more goods. (c) the same quantity of goods. (d) different types of goods.
Inverse Relationship Positive Relationship
https://youtu.be/g9aDizJpd_s?list=PL8dPuuaLjXtPNZwz5_o_5 uirJ8gQXnhEO
in disequilibrium?
Price per slice Equilibrium Point
Finding Equilibrium
Price of a slice
Quantity demanded Quantity supplied Result Combined Supply and Demand Schedule $ .50 300 100 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $.50 Slices of pizza per day 50 100 150 200 250 300 350 Supply Demand
The point at which quantity demanded and quantity supplied come together is known as equilibrium.
$2.00 $2.50 $3.00 150 100 50 250 300 350 Surplus from excess supply $1.50 200 200 Equilibrium Equilibrium Price a Equilibrium Quantity $1.00 250 150 Shortage from excess demand
If the market price or quantity supplied is anywhere but at the equilibrium price, the market is in a state called disequilibrium. There are two causes for disequilibrium: Interactions between buyers and sellers will always push the market back towards equilibrium.
Excess Demand
quantity demanded is more than quantity supplied. Excess Supply
quantity supplied exceeds quantity demanded.
In some cases the government steps in to control prices. These interventions appear as price ceilings and price floors.
that can be legally charged for a good.
rent control, a situation where a government sets a maximum amount that can be charged for rent in an area.
SHORTAGE.
by the government, that must be paid for a good or service.
minimum wage, which sets a minimum price that an employer can pay a worker for an hour of labor.
https://www.dol.gov/whd/minwage/america.htm
(a) the point at which quantity supplied and quantity demanded are the same (b) the point at which unsold goods begin to pile up (c) the point at which suppliers begin to reduce prices (d) the point at which prices fall below the cost of production
(a) market equilibrium (b) base wage rate (c) minimum wage (d) employment guarantee
(a) the point at which quantity supplied and quantity demanded are the same (b) the point at which unsold goods begin to pile up (c) the point at which suppliers begin to reduce prices (d) the point at which prices fall below the cost of production
(a) market equilibrium (b) base wage rate (c) minimum wage (d) employment guarantee
shift in the demand curve?
a related good?
things held constant.”
assumption is true.
longer occurs along the demand curve. Rather, the entire demand curve shifts.
Changes in consumers incomes affect demand. A normal good is a good that consumers demand more of when their incomes increase. An inferior good is a good that consumers demand less of when their income increases.
Whether or not we expect a good to increase or decrease in price in the future greatly affects our demand for that good today.
Changes in the size of the population also affects the demand for most products.
Advertising plays an important role in many trends and therefore influences demand.
to one of the Determinants of Demand (absent of a price change)
Demanded is one point
particular Price.
The demand curve for one good can be affected by a change in the demand for another good.
(a) a change in price (b) a change in income (c) a change in consumer expectations (d) a change in the size of the population
(a) When two goods are complementary, increased demand for one will cause decreased demand for the other. (b) When two goods are complementary, increased demand for one will cause increased demand for the other. (c) If two goods are substitutes, increased demand for one will cause increased demand for the other. (d) A drop in the price of one good will cause increased demand for its substitute.
(a) a change in price (b) a change in income (c) a change in consumer expectations (d) a change in the size of the population
(a) When two goods are complementary, increased demand for one will cause decreased demand for the other. (b) When two goods are complementary, increased demand for one will cause increased demand for the other. (c) If two goods are substitutes, increased demand for one will cause increased demand for the other. (d) A drop in the price of one good will cause increased demand for its substitute.
machinery, or labor used to produce a good, will affect supply.
decreasing profitability and supply.
costs and increase supply.
discourage an entrepreneur or industry. Subsidies A subsidy is a government payment that supports a business or market. Subsidies cause the supply of a good to increase. Taxes The government can reduce the supply of some goods by placing an excise tax on them. An excise tax is a tax on the production or sale of a good. Regulation Regulation occurs when the government steps into a market to affect the price, quantity, or quality of a good. Regulation usually raises costs.
the same goods and services here.
restricted goods.
firms leave the market, supply will decrease.
(a) A rise in the cost of raw materials lowers the overall cost of production. (b) The good becomes cheaper to produce. (c) The good becomes more expensive to produce. (d) This does not have any affect on the eventual price of a good.
happens to the supply curve for that good? (a) It shifts to the left. (b) It shifts to the right. (c) It reverses direction. (d) The supply curve is unaffected.
(a) A rise in the cost of raw materials lowers the overall cost of production. (b) The good becomes cheaper to produce. (c) The good becomes more expensive to produce. (d) This does not have any affect on the eventual price of a good.
happens to the supply curve for that good? (a) It shifts to the left. (b) It shifts to the right. (c) It reverses direction. (d) The supply curve is unaffected.
market equilibrium?
forces in motion that lead the market to a new equilibrium price and quantity sold.
This creates a new market equilibrium.
producers will raise prices and demand will decrease.
supplied.
searching for a good or service.
equilibrium is found.
$800 $600 $400 $200 Price Output (in millions)
Graph A: A Change in Supply
1 2 3 4 5
Graph A shows how the market finds a new equilibrium when there is an increase in supply. Graph B shows how the market finds a new equilibrium when there is an increase in demand.
Original supply Demand a New supply b c
Graph B: A Change in Demand
Output (in thousands) $60 $50 $40 $30 $20 $10 900 800 700 600 500 400 300 200 100 Price Supply Original demand a New demand c b
has a (a) lower market price and a higher quantity sold. (b) higher market price and a higher quantity sold. (c) lower market price and a lower quantity sold. (d) higher market price and a lower quantity sold.
(a) market forces push toward equilibrium (b) sellers waste their resources (c) excess demand is created (d) unsold perishable goods are thrown out
has a (a) lower market price and a higher quantity sold. (b) higher market price and a higher quantity sold. (c) lower market price and a lower quantity sold. (d) higher market price and a lower quantity sold.
(a) market forces push toward equilibrium (b) sellers waste their resources (c) excess demand is created (d) unsold perishable goods are thrown out
and finished goods in to the hands of buyers.
language that both consumers and producers can use.
Prices provide a language for buyers and sellers.
Prices communicate to both buyers and sellers whether goods or services are scarce or easily available. Prices can encourage or discourage production.
Think of prices as a traffic light. A relatively high price is a green light telling producers to make more. A relatively low price is a red light telling producers to make less.
In many markets, prices are much more flexible than production levels. They can be easily increased or decreased to solve problems of excess supply or excess demand.
Unlike central planning, a distribution system based on prices costs nothing to administer.
the uses that consumers value most highly.
consumer decisions.
pollution, that “spill over” onto people who have no control over how much
make the best purchasing or selling decision.
(a) businesses working to earn a profit (b) government regulation (c) the need for fair allocation of resources (d) the need to buy goods regardless of price
(a) Price changes assist the centrally planned economy. (b) Price changes serve as a tool for distributing goods and services. (c) Price changes limit all markets to people who have the most money. (d) Price changes prevent inflation or deflation from affecting the supply of goods.
(a) businesses working to earn a profit (b) government regulation (c) the need for fair allocation of resources (d) the need to buy goods regardless of price
(a) Price changes assist the centrally planned economy. (b) Price changes serve as a tool for distributing goods and services. (c) Price changes limit all markets to people who have the most money. (d) Price changes prevent inflation or deflation from affecting the supply of goods.
Marginal Product of Labor
Labor (number
Output (beanbags per hour) Marginal product of labor
— 1 4 4 2 10 6 3 17 7 4 23 6 5 28 5 6 31 3 7 32 1 8 31 –1
have to consider how the number of workers they hire will affect their total production.
product of labor is the change in
Increasing, Diminishing, and Negative Marginal Returns
Labor (number of workers) Marginal Product of labor (beanbags per hour) 8 7 6 5 4 3 2 1 –1 –2 –3
Diminishing marginal returns occur when marginal production levels decrease with new investment.
4 5 6 7 Diminishing marginal returns
Negative marginal returns occur when the marginal product of labor becomes negative.
8 9 Negative marginal returns
1 2 3 Increasing marginal returns
Increasing marginal returns
levels increase with new investment.
much of a good is produced. Examples: rent and salaries
much is produced. Examples: costs of raw materials, some labor costs.
a good.
Production Costs
Total revenue Profit (total revenue – total cost) Marginal revenue (market price) Marginal cost Total cost (fixed cost + variable cost) Variable cost Fixed cost Beanbags (per hour) $ –36 –20 21 40 1 2 3 4 $0 24 48 72 96 $24 24 24 24 24 — $8 4 3 5 $36 44 48 51 56 $0 8 12 15 20 $36 36 36 36 36 57 72 84 93 5 6 7 8 120 144 168 192 24 24 24 24 7 9 12 15 63 72 84 99 27 36 48 63 36 36 36 36 98 98 92 79 216 240 264 288 24 24 24 24 19 24 30 37 36 36 36 36 9 10 11 12 82 106 136 173 118 142 172 209
usually equal to price.
revenue is equal to marginal cost.
(a) some workers increase output but others have the opposite effect (b) additional workers increase total output but at a decreasing rate (c) only a few workers will have to wait their turn to be productive (d) additional workers will be more productive
(a) set production so that total revenue plus costs is greatest (b) set production at the point where marginal revenue is smallest (c) determine the largest gap between total revenue and total cost (d) determine where marginal revenue and profit are the same
(a) some workers increase output but others have the opposite effect (b) additional workers increase total output but at a decreasing rate (c) only a few workers will have to wait their turn to be productive (d) additional workers will be more productive
(a) set production so that total revenue plus costs is greatest (b) set production at the point where marginal revenue is smallest (c) determine the largest gap between total revenue and total cost (d) determine where marginal revenue and profit are the same