Which of the following is true?
a. The objective of the firm is to maximize profits, by producing the amount that maximizes the difference between its total revenues and total cost.
b. The objective of the firm is to maximize profits, by producing the amount that maximizes the difference between its average revenue and average total cost.
c. The objective of the firm is to maximize profits, by producing the amount that maximizes the difference between its average
revenue and average variable cost.
d. The objective of the firm is to maximize profits, by producing the amount that maximizes the difference between its marginal revenue and marginal cost.
e. None of the above is true.
Which is the best example of a real-world market that is close to perfect competition?
a. A market with product differentiation, such as ice cream (Coldstone, Dairy Queen, etc.).
b. A market where a few firms have a large market share, such as operating systems for mobile devices (Apple iOS, Google Android, Microsoft Windows).
c. A market with many barriers to entry, such as computer chips (Intel, AMD,
etc.).
d. A market with many sellers and little product differentiation (such as fruits, vegetables, and other agricultural goods).
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