Describe and explain how a perfectly competitive firm's demand curve is found
What will be an ideal response?
The interaction of supply and demand in the industry determines the price. The firm is a price taker, so it takes the price as a given. It can sell as many units as it wants at this price. Hence, the demand curve for the product of a perfectly competitive firm is perfectly elastic, or horizontal, at the market price.
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There tends to be ________ relationship between the growth rate of the money supply and the inflation rate
A) an inverse B) a direct C) no significant D) a negative
If a decrease in the price of a good decreases the total revenue, the demand for the good is
a. price elastic b. price inelastic c. income elastic d. income inelastic
A price-taking firm's marginal revenue is ______ the price of its output.
A. equal to B. greater than C. less than D. less than or equal to
One key difference between national income and net domestic product is
A. net domestic product includes indirect business taxes and transfers while national income does not. B. net domestic product represents income that is available to individuals while national income does not. C. net domestic product does not include income earned by the factors of production while national income does. D. net domestic product only includes the net additions to the economy's stock of capital while national income does not.