In long-run equilibrium under perfect competition,
a. the firm and the industry will have the same cost curves.
b. only a very few firms will be earning economic profits.
c. the demand curves facing individual firms will fall to the level of minimum AC.
d. individual firms will tend to increase their outputs.
c
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Refer to Figure 4-10. What is the area that represents the producer surplus after the imposition of the ceiling?
A) F B) D + F + G C) A + B + D + F + G D) F + G
If the interest rate is 7% and the tax rate is 15%, what is the after -tax cost of capital for the firm?
What will be an ideal response?
One of the widely acknowledged problems with using the consumer price index as a measure of the cost of living is that the CPI
a. fails to measure all changes in the quality of goods. b. displays a housing bias. c. accounts for changes in prices of some goods, but prices of certain goods are assumed to remain constant. d. All of the above are correct.
Table 16.2Consider the data in Table 16.2. Both firms can benefit if Firm A sells its pollution permit allowing it to generate 100 gallons of wastewater to Firm B for:
A. a price between $7 and $12. B. a price between $0 and $7. C. a price between $12 and $18. D. Both firms cannot benefit if A sells permits to B.