What is the relationship among the following variables for a perfectly competitive firm: the market price, average revenue and marginal revenue?
A) Average revenue is equal to the market price; average revenue is greater than marginal revenue.
B) The market price is equal to both average revenue and marginal revenue.
C) Average revenue is equal to marginal revenue; average revenue is greater than the market price.
D) As a firm lowers the market price to sell more output, marginal revenue and average revenue will be less than the market price.
Answer: B
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In the linear probability model, the interpretation of the slope coefficient is
A) the change in odds associated with a unit change in X, holding other regressors constant. B) not all that meaningful since the dependent variable is either 0 or 1. C) the change in probability that Y=1 associated with a unit change in X, holding others regressors constant. D) the response in the dependent variable to a percentage change in the regressor.
If price falls from $100 to $99 and quantity demanded rises from 2 to 3, the price elasticity of demand is
A. 0.03. B. 1.75. C. 25.7. D. 39.8.
inflation redistributes
What will be an ideal response?
"Ceteris paribus" means:
a. if events A and B occur together, one must cause the other
b. all relevant details are included
c. what is true for the individual must be true for the whole.
d. holding other things constant.