MC ATC $20 - $16--- $12 -- - MR 1 50 100 Quantity What price should a competitive price- searcher firm charge with the cost and demand conditions depicted above if it wants to maximize its profi? O $12 O $16 $20 d) $24 Save All Ans Solution Select - D ........ $ 24 Fundamental principle of pricing strategies indicates that, cost of suppling a unit more ( marginal cost) cannot be more than revenue from selling it. In the diagram we see that MC = MR at 50 units of demand and vertical line cuts ATC at a price of 24. Thus profit maximization is possible only at a price of $ 24.

1. Milton Friedman argued that the Bank of United States:Acould not pay back back any money to
their depositors when they closed, and this was evidence that the Bank of United States was
correctly closed.
Solution
Milton Freidman argued that the Federal Reserve (that was the Bank of United States during that
time) should have provided the banks (that eventually closed) with additional cash to meet the
demands of the banks depositors. Friedman argued that the Fed should have used open market
operations to increase money supply by making large purchases of government bonds. However,
Friedman argued that the Bank of United States did not act as a lender of last resort.
D. was not much different that other banks that were not closed.