In long-run equilibrium, a perfectly competitive firm produces the output level that minimizes average total cost
a. True
b. False
Indicate whether the statement is true or false
True
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The above figure shows the payoff matrix for two firms, A and B, choosing to produce a basic computer or an advanced computer
Now the payoff of the firm who produces a basic computer falls to 10 if the other firm chooses to produce an advanced computer. Then A) both firms will have dominant strategies. B) Nash equilibria will not change. C) joint profits will be maximized at the Nash equilibrium. D) Firm A and firm B will choose different actions.
A market might have an upward-sloping long-run supply curve if
a. firms have different costs. b. consumers exercise market power over producers. c. all factors of production are essentially available in unlimited supply. d. the entry of new firms into the market has no effect on the cost structure of firms in the market.
The different shapes of the aggregate supply curve:
A. Determine the level of reserves held by the banking system. B. Result in the Fed's need for total control of the money supply. C. Determine the impact of monetary policy on price level and output. D. Explain why the Fed must respond to market instability.
"Our marginal revenue is greater than our marginal cost at the current production level." This statement indicates that the firm:
A. is maximizing profits. B. should decrease the quantity produced to increase profits. C. should increase the quantity produced to increase profits. D. None of the statements associated with this question are correct.