In the above figure, if the price is $12 per unit, how many units will a profit maximizing perfectly competitive firm produce?
A) 0
B) 20
C) 30
D) 35
C
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All straight-line demand curves have the same elasticity value since the slope is constant.
Answer the following statement true (T) or false (F)
Which of the following is likely to result in a higher equilibrium price? a. An increase in both demand and supply
b. A decrease in both demand and supply. c. An increase in demand and a decrease in supply. d. A decrease in demand and an increase in supply.
When a nation prints money (rather than taxing directly) to finance its government spending, it results in inflation, and purchasing power of the private sector falls. This is known as:
A) benchmarking. B) indirect taxation. C) seigniorage. D) creeping inflation.
In the basic Keynesian model, an increase in transfer payments:
A. reduces short-run equilibrium output. B. increases potential output. C. increases short-run equilibrium output. D. reduces potential output.