If a perfectly competitive firm sells 50 units of output at a market price of $10 per unit, its marginal revenue is:
A. more than $10.
B. less than $10.
C. $10.
D. $500.
Answer: C
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Which of the following relationships correctly identifies the profit maximization condition of a firm in a perfectly competitive market?
A) Marginal cost < Price = Marginal revenue B) Marginal cost > Price = Marginal revenue C) Marginal cost = Price = Marginal revenue D) Marginal cost = Price < Marginal revenue
A concern about crowding out caused by increased government borrowing is that:
a. interest rates on private borrowing fall. b. lower rates of economic growth can result from a decline in business investment spending. c. the federal government may default on its loans. d. foreign lenders find it less attractive to help finance federal deficits.
When economic profits in an industry are zero and implicit costs are positive: a. accounting profits will be greater than zero
b. resources will be attracted to the industry. c. resources will not tend to either enter or leave the industry, other things equal. d. both (a) and (c) will be true.
Micromania's City Council has been discussing policy options regarding the local taxi company. Citizens have complained that it is a natural monopoly and that its fees are inappropriate. Which of the following would allow the company to stay in business while guaranteeing a "reasonable" taxi price for citizens?
a. average cost pricing b. marginal cost pricing c. laissez-faire pricing d. countervailing pricing e. contestable pricing