Survivability in a perfectly competitive world requires that
A) firms minimize average total cost.
B) firms produce new and different products.
C) firms maximize profit.
D) firms maximize revenue.
C
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What are the reasons for the development and growth of the Eurodollar market?
What will be an ideal response?
Assume declining profits in the market for Internet service force several firms in the area to drop out of the market Which of the following best describes the effect of the reduction in the number of service providers and the subsequent adjustment of the market to the new equilibrium price and quantity?
A) Quantity supplied would decrease, creating excess supply at the initial equilibrium price. Demand would then decrease until quantity demanded and quantity supplied are once again equal. B) Quantity supplied would decrease, creating excess demand at the initial equilibrium price. Demand would then decrease until quantity demanded and quantity supplied are once again equal. C) Supply would increase, creating excess demand at the initial equilibrium price. Price would then rise, causing quantity demanded to decrease and quantity supplied to increase until a new equilibrium is reached. D) Supply would decrease, creating excess demand at the initial equilibrium price. Price would then rise, causing quantity demanded to decrease and quantity supplied to increase until a new equilibrium is reached.
If import restrictions prohibit foreigners from selling various goods in the U.S. market,
a. the United States will be able to export more goods abroad. b. foreigners will have fewer U.S. dollars with which to buy goods from Americans. c. the United States will be able to produce a larger output than would otherwise be the case. d. the domestic producers in the protected industries will supply goods to U.S. consumers at lower prices than would otherwise be the case.
Which of the following is an example of an increase in government purchases?
a. The government builds new roads. b. The Federal Reserve purchases government bonds. c. The government decreases personal income taxes. d. The government increases unemployment insurance benefit payments.