Both a perfectly competitive firm and a monopolist:
A. always earn an economic profit.
B. maximize profit by setting marginal cost equal to marginal revenue.
C. maximize profit by setting marginal cost equal to average total cost.
D. are price takers.
Answer: B
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A decision or a choice that is made after using optimization analysis:
A) has zero opportunity cost. B) is not necessarily risk free. C) is the same for all individuals. D) cannot be justified using normative analysis.
Managers can be seen as monitoring ____ within the firm
A) externalities. B) property rights C) stockholders. D) accounting profits.
Which of the following will increase interest rates in the short run?
a. an decrease in reserve requirements b. open market sales by the Fed c. a decrease in real GDP d. an decrease in the price level
When the price of a good is $5, the quantity demanded is 120 units per month; when the price is $7, the quantity demanded is 100 units per month. Using the midpoint method, the price elasticity of demand is about
a. 0.55. b. 1.83. c. 2. d. 10.