If the government imposed a price ceiling on soda above this good's current market clearing price, there would be
A. a shortage of soda at the ceiling price.
B. an increase in the price of soda.
C. a surplus of solda at the ceiling price.
D. no change in the price of soda.
Answer: D
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A firm sets its output where
A) marginal profit minus marginal cost equals zero (MP - MC = 0). B) marginal revenue minus marginal profit equals zero (MR - MP = 0). C) marginal revenue minus marginal cost equals zero (MR - MC = 0). D) marginal revenue minus marginal cost is greater than zero (MR - MC > 0)
An example of a negative externality created in the market system would be
A) poverty. B) unemployment. C) an increased number of bird flu patients. D) water pollution.
Which of the following would not help identify market structure?
a. number of firms in the industry b. type of product produced in the industry c. ease of entry into the industry d. forms of competition among firms in the industry e. price of the good
If the marginal revenue product of the last worker hired exceeds the marginal factor cost of the worker, the firm would be better served if it
A) hires additional workers. B) maintains its current level of workers already hired. C) lays off the last worker hired. D) None of the above is a good option for a profit-seeking firm.