Both a perfectly competitive firm and a monopolist find that:
A. price and marginal revenue are the same.
B. they can sell as many units of output as they want at the market price.
C. price is less than marginal revenue.
D. it is best to expand production until the benefit and the cost of the last unit produced are equal.
Answer: D
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If production involves increasing opportunity cost, then moving nearer the horizontal axis will increase the opportunity cost of
a. the good that is shown on the horizontal axis. b. the good that is shown on the vertical axis. c. both of the goods shown on the axes. d. neither of the goods shown on the axes.
People tend to hold less money as
A. credit availability rises. B. the average price level falls. C. incomes fall. D. All of the choices are correct.
The baby boomer generation is just starting to retire, and waiting lists to get into nursing homes are on the rise. We could reasonably expect the demand for geriatric care to:
A. increase due to expectations of future prices. B. decrease due to the number of buyers increasing. C. decrease due to expectations of future prices. D. increase due to the number of buyers increasing.
Since trash generation involves an externality, the way economists might address the problem of trash generation that is most likely to be optimal is by:
A. not allowing persons to throw away more trash than is acceptable as a maximum. B. having the government require mandatory sorting and recycling of trash. C. integrating the cost of the externality into the initial price of the good. D. having the cost of the externality be paid by the government.