When all markets are in simultaneous equilibrium, the general equilibrium condition has been satisfied.
Answer the following statement true (T) or false (F)
True
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Refer to Cournot Problem. Total industry output will be
Consider a Cournot oligopoly with two identical firms. These firms each have constant marginal costs of $10. The market for these firms’ product has demand Q = 100 - P. a. 30 units. b. 45 units. c. 60 units. d. 90 units.
Where does equilibrium occur in an income expenditure diagram? What would be the effect if production is at either on the left or right side of the equilibrium point?
What will be an ideal response?
Claude's Copper Clappers sells clappers for $40 each in a perfectly competitive market. At its present rate of output, Claude's marginal cost is $39, average variable cost is $45, and average total cost is $60 . To improve his profit/loss situation, Claude should
a. increase output b. reduce output but not to zero c. maintain the present rate of output d. shut down e. raise the price
In a perfectly competitive industry the market price is $25. A firm is currently producing 10,000 units of output; average total cost is $28, marginal cost is $20, and average variable cost is $20. The firm should
A. produce less because the next unit of output decreased profit by $3. B. raise price because the firm is losing money. C. keep output the same because the firm is producing at minimum average variable cost. D. shut down because the firm is losing money. E. produce more because the next unit of output increases profit by $5.