Price = MR only if the price is fixed
Indicate whether the statement is true or false
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Which of the following is NOT included in the M1 money supply?
A) currency B) passbook savings accounts C) traveler's checks D) checkable and debitable accounts
If an average cost pricing rule is imposed on the natural monopoly shown in the figure above, then the firm's economic profit will be
A) $9 million. B) $12 million. C) $0, that is, the firm's owners make only a normal profit. D) negative, that is, the firm incurs an economic loss.
The price elasticity of supply is calculated as the change in supply divided by the change in price
Indicate whether the statement is true or false
If a nation protects an industry because it believes that there are positive externalities in the production process, it is asserting that the free market will
A) produce less than is optimal from society's point of view. B) produce more than is optimal from society's point of view. C) produce the correct amount but charge too high a price. D) produce the correct amount but charge too low a price. E) None of the above.