The demand curve for a perfectly competitive firm is horizontal because
A) consumers are willing to pay any price to obtain its product.
B) its production decisions cannot influence the market price.
C) the firm profits from setting its price higher than the market price.
D) its product is easy for consumers to differentiate from those of other firms.
B
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In the United States, an example of a common in-kind transfer would be:
A. public housing. B. earned income tax credit. C. Aid to Families with Dependent Children. D. All of these are in-kind transfers.
Measured as a share of the economy, government expenditures on ____ have declined during the last four decades
a. health care b. national defense c. transfer payments d. Social Security benefits
To maximize total profit in the short run, a perfectly competitive firm must find:
a. the quantity at which total revenue is at a maximum. b. the quantity at which total cost is at a minimum. c. the quantity at which total revenue is at a maximum and total cost is at a minimum. d. the quantity at which total revenue exceeds total cost by the greatest amount.
Suppose Wave detergent is sold in a monopolistically competitive market. If the price of Wave detergent is currently $6, and the average cost of producing Wave is $4, in the long run we can expect:
A. firms to enter the detergent market and sell products similar to Wave, shifting the demand curve for Wave to the left. B. firms to enter the detergent market and sell product similar to Wave, shifting the demand curve for Wave to the right. C. the producers of Wave to go out of business. D. the producers of Wave to earn economic profits greater than zero.