Which of the following is true about perfect competition?
a. Each firm faces a downward-sloping demand curve.
b. Each firm must face a horizontal demand curve.
c. Firms are price-makers.
d. Marginal cost equals average cost.
e. Firms can increase sales by lowering their price.
B
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The peak of the total revenue curve is achieved at the point where:
a. marginal revenue is the highest. b. price is the highest. c. marginal revenue is zero. d. marginal cost is zero.
Under a rule of reason approach, which of the following would be legal in the United States?
a. the merger of two small companies in an unconcentrated market b. price fixing between IBM and Compaq c. the merger between Ford and General Motors d. Kellogg's and General Mills collude to drive Quaker Oats out of the business e. Exxon Oil and Mobil Oil elect the same person to their boards of directors
Suppose that the labor market for life guards is initially in equilibrium. Then a new television series debuts which glamorizes the social opportunities for life guards. What happens to the equilibrium wage and quantity of life guards?
a. Both the equilibrium wage and quantity increase. b. Both the equilibrium wage and quantity decrease. c. The equilibrium wage increases, and the equilibrium quantity decreases. d. The equilibrium wage decreases, and the equilibrium quantity increases.
Fran runs a doughnut shop in a tiny 3-person town. The accompanying table shows the quantity demand by the three townspeople at various prices.Price Per DoughnutQuantity Demandedby AlQuantity Demandedby BettyQuantity Demandedby Carol10 cents104625 cents92535 cents71550 cents504When the price of a doughnut is 50 cents, what is the market demand for doughnuts?
A. 9 doughnuts B. 31 doughnuts C. 20 doughnuts D. 5 doughnuts