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    Managerial Economics Study Set 2
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    Exam 12: More Realistic and Complex Pricing
  5. Question
    Firms That Face Capacity Constraints Can Only Increase Output Only
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Firms That Face Capacity Constraints Can Only Increase Output Only

Question 3

Question 3

Multiple Choice

Firms that face capacity constraints can only increase output only up to the capacity,but no further.Therefore,firms


A) Should price to capacity as long as MR > MC
B) Should price to capacity as long as MR = MC
C) Should price to capacity as long as MR < MC
D) Should not take capacity into consideration in pricing decisions

Correct Answer:

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