What are the key functions of the equilibrium price in a perfectly competitive market?
What will be an ideal response?
There are three key functions of equilibrium price in a perfectly competitive market. They are:
a) The equilibrium price efficiently allocates scarce resources to market participants.
b) The equilibrium price efficiently allocates the production of goods within an industry.
c) The equilibrium price efficiently allocates scarce resources across industries.
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If an epidemic hits a Malthusian economy, the immediate consequence is
A) an increase in the standard of living. B) a reduction in the standard of living. C) no change in the standard of living. D) dependent on the population growth rate.
Positive analysis can be described as
A) the study of whether people respond to positive incentives. B) the study of whether people respond to negative incentives. C) a value-free approach to inquiry. D) a study that is not tested empirically.
Using the expenditure approach to GDP accounting, which of the following are included in the investment category?
a. the purchase of government bonds b. the purchase of corporate bonds c. the purchase of corporate stocks d. none of the above
Abstract economic theory can be used by academicians but not by politicians or business people.
Answer the following statement true (T) or false (F)