In perfect competition, what is the relationship between the demand for the firm's output and the market demand?
What will be an ideal response?
The market demand curve for the goods and services in a perfectly competitive market is downward sloping. However, no single firm in this market can influence the price at which it sells its output. This point means a firm that is a price taker must take the equilibrium market price as given, and the firm faces a perfectly elastic demand.
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In which market type does the firm face the most inelastic demand curve?
A) perfect competition B) monopolistic competition C) monopoly D) oligopoly
On which point on the graph above should the economy operate if it wants to maximize its future production possibilities?
a. A b. B c. C d. D
Deregulation, especially for the transportation and telecommunication industries, was the trend in the United States during the:
A. 1930s and it means increasing or phasing in government restrictions on economic activity. B. 1950s and it means elimination or phasing out of government restrictions on economic activity. C. 1970s and it means increasing or phasing in government restrictions on economic activity. D. 1980s and it means elimination or phasing out of government restrictions on economic activity.
Suppose a consumer is at an optimum. What happens when the price of one good she has been consuming increases?
A. The marginal utility per dollar spent on the last unit consumed of that good is now smaller than the marginal utility per dollar spent on other goods the person consumes. B. The value of the marginal utility of the last unit consumed decreases. C. The value of the marginal utility of the last unit consumed increases. D. The marginal utility per dollar spent on the last unit consumed of that good increases by the same proportion as the price increases.