Suppose that a firm in a competitive market is currently maximizing its short-run profit at an output of 50 units. If the current price is $9, the marginal cost of the 50th unit is $9, and the average total cost of producing 50 units is $4, what is the firm's profit?
a. $0
b. $200
c. $250
d. $450
c
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Consumer surplus in a market for a product would be equal to the area under the demand curve if
A) the product was produced in a perfectly competitive market. B) marginal cost was equal to the market price. C) the market price was zero. D) producer surplus was equal to zero.
Refer to the graph shown. The line segment that represents average total costs of producing Q* is:
A. BQ*. B. CQ*. C. AQ*. D. AB.
If the expected real interest rate 5% and expected inflation 3%, the nominal interest rate in year t is approximately
A) 2%. B) 3%. C) 5%. D) 8%. E) 11%.
In a competitive market, if buyers did not know all the prices charged by the many firms,
A) all firms still face horizontal demand curves. B) firms sell a differentiated product. C) demand curves can be downward sloping for some or all firms. D) the number of firms will most likely decrease.