The demand curve for the product of a perfectly competitive firm is
A. perfectly inelastic.
B. upward sloping.
C. perfectly elastic.
D. downward sloping.
Answer: C
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The market demand curve indicates
a. the minimum price someone would be willing to pay for each unit of a good b. the cost of producing each unit of a good c. the price someone pays for each unit of a good d. how many people will purchase a good at each possible price e. the maximum price someone would be willing to pay for each unit of a good
The percentage change in quantity demanded of good A divided by the percentage change in price of good B is the formula for
a. cross-price elasticity of demand. b. income elasticity of demand. c. zero elasticity of demand. d. infinite elasticity of demand.
If the Federal Reserve increases the money supply, then initially people want to
a. sell bonds so the interest rate rises. b. sell bonds so the interest rate falls. c. buy bonds so the interest rate rises. d. buy bonds so the interest rate falls.
If the wage rate is less than the marginal revenue product of labor, the firm should ________ to maximize profits.
A. hire more labor and produce less output B. hire less labor and produce less output C. hire less labor and produce more output D. hire more labor and produce more output