Questions-
1. When the quantity of unicycles is 40, the price is $16 and the marginal cost is $16. Which of the following statements is true?
A) The firm is making economic losses.
B) The firm is making a normal rate of profit.
C) The firm will become a monopoly.
D) The firm is making economic profits.
2. If the firm is experiencing diminishing marginal returns, when more of a resource is added:
A) marginal costs decline.
B) profits begin to drop.
C) output begins to drop.
D) marginal costs increase.
Additional Information-
These multiple choice questions belong to Economics. The first question is about marginal cost and the second question is about diminishing marginal returns.