In perfect competition, P = MC means
A. Price equals market cost.
B. Price equals marginal cost.
C. Profit equals market cost.
D. Profit equals marginal cost.
Answer: B
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Which statement most adequately describes the productivity of trade relative to the productivity of agriculture and manufacturing?
A) Trade is essential in an economy once agriculture and manufacturing have developed, even though it is not productive. B) Trade is less productive than agriculture or manufacturing. C) The word productive must be applied to agriculture or manufacturing in the same way it is applied to trade. D) Trade is productive only insofar as it distributes newly produced agricultural or manufactured goods. E) Trade is rarely productive because it almost never increases the quantity of goods in the economy.
A recessionary gap is the amount by which aggregate expenditures ____ the amount required to achieve full-employment equilibrium GDP
a. exceed b. equal c. fall short of d. are greater than
A flight to quality should result in the:
A. yield on corporate bonds falling and the price of U.S. Treasury Securities rising. B. yield on U.S. Treasury Securities falling and the price of corporate bonds rising. C. price of U.S. Treasury Securities rising and the price of corporate bonds rising. D. yield on U.S. Treasury securities falling and the price of corporate bonds falling.
For the perfectly competitive firm, price
A) equals average revenue and marginal revenue. B) equals average total cost. C) changes as output changes. D) depends on the fixed cost for the firm.