If a firm faces a downward-sloping demand curve, then:

A. the firm could be either a perfectly competitive firm or an imperfectly firm.
B. it is a perfectly competitive firm.
C. the firm's marginal revenue from selling an additional unit of output is less than price.
D. the firm's production process exhibits economies of scale.


Answer: C

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Jan is a hyperbolic discounter. She puts weight 1 on utility earned in the current period but only weight .5 on utility earned in future periods. In period 1 she comes up with a plan, which involves taking some action that leads to a loss of C utils in period 2 but provides a benefit of B utils in period 3 . What values of B and C will lead her to behave inconsistently and not follow through on

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Does a competitive firm have the ability to influence the quantity of output it supplies? Does it have the ability to influence its average revenue?

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