Does a perfectly competitive producer have any incentive to undercut the current market price? Explain your answer
What will be an ideal response?
A perfectly competitive producer has no incentive to undercut the market price because the producer can sell all he or she produces at the going market price. In this case, a producer will not lower the price he or she charges because no additional sales can be garnered. Hence it is nonsensical to undercut the market price because the lower price means lower revenue and hence lower profit.
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The Condorcet paradox shows that even if each individual in a group has transitive preferences, the group's collective preferences may not be transitive
Indicate whether the statement is true or false
The Federal Reserve econometric model estimates that a 1 percent increase in the money supply will
A) increase real GDP by 1 percent after 3 years. B) increase real GDP by 2 percent in 3 years. C) increase real GDP by 3 percent 3 years. D) have no effect on real GDP after 2 years.
An example of a final service is:
A. a tire to replace your flat. B. a used car. C. getting the oil changed in your car. D. Tires purchased by Ford to put on their new Explorers.
A good that is both excludable and rivalrous is a(n):
a. public good. b. club good. c. private good. d. inferior good. e. necessary good.