A perfectly competitive firm is producing zero units of output in the short run. We know that price is
A) below the minimum point of its average fixed cost curve.
B) below the minimum point of its average variable cost curve.
C) below the minimum point of its average total cost curve.
D) between the minimum points of its average total cost curve.
Answer: B
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Explain risk and liquidity of assets
What will be an ideal response?
If the demand in a perfectly competitive market decreases, the price will:
A. temporarily increase. B. temporarily decrease. C. increase permanently. D. decrease permanently.
Price discrimination that tends to lessen competition is outlawed by the:
a. Sherman Antitrust Act. b. Clayton Act. c. Federal Trade Commission Act. d. Interstate Commerce Act.
If at the prevailing interest rate the quantity of money demanded is $2 trillion, and the supply of money is $1.5 trillion, then which of the following is true?
A. There is a shortage of money, and consequently interest rates must fall in order to achieve an equilibrium in the money market. B. There is a surplus of money, and consequently interest rates must fall in order to achieve an equilibrium in the money market. C. There is shortage of money, and consequently interest rates must rise in order to achieve an equilibrium in the money market. D. There is a surplus of money, and consequently interest rates must rise in order to achieve an equilibrium in the money market.