Under conditions of perfect competition, an individual producer
a. always maximizes output.
b. operates where MR equals MC.
c. never suffers a loss.
d. operates where MR is greater than MC.
b. operates where MR equals MC.
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If the market price is $25 in a perfectly competitive market, the marginal revenue from selling the fifth unit is
A) $5. B) $12.50. C) $25. D) $125.
German banks are able to control a significant number of German firms by
A) making large syndicated loans. B) ownership of shares alone. C) ownership of shares and having proxy voting power over the shares in their custody. D) sheer size in the lending market.
Answer the following statements true (T) or false (F)
1. In the multiplier formula, 1/MPS equals the multiplier. 2. If the MPC is five-sixths, the size of the multiplier is 6. 3. If planned investment decreases, the multiplier will decrease the equilibrium income. 4. Various estimates of the multiplier for the U.S. economy place it between 2 and 3, depending on the level of employment. 5. The classical doctrine assumed that the normal equilibrium position for the economy was at full employment.
Because a sufficient number of borrowers cannot be guaranteed, we refer to a potential money multiplier when discussing the banking system
Indicate whether the statement is true or false