A firm has increasing returns to scale if:
A. a proportional change in the use of all inputs produces a more than proportional change in output.
B. a proportional change in the use of all inputs produces a less than proportional change in output.
C. a proportional change in the use of all inputs produces the same proportional change in output.
D. an increase in capital leads to an increase in output.
A. a proportional change in the use of all inputs produces a more than proportional change in output.
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For a perfectly competitive firm, which of the following is not true at profit maximization?
A) Marginal revenue equals marginal cost. B) Price equals marginal cost. C) Market price is greater than marginal cost. D) Total revenue minus total cost is maximized.
The demand curve faced by a pure monopolist
A) is the same as its marginal revenue curve. B) is perfectly inelastic. C) lies below the marginal revenue curve. D) is the market demand curve.
In the long-run equilibrium of a market with free entry and exit, if all firms have the same cost structure, then
a. marginal cost exceeds average total cost. b. the price of the good exceeds average total cost. c. average total cost exceeds the price of the good. d. firms are operating at their efficient scale.
The law of diminishing marginal utility is in effect when marginal utility is
A. positive and increasing. B. initially zero and then decreasing. C. positive and decreasing. D. initially zero and then increasing.