If a firm in a perfectly competitive market faces the cost curves in the graph shown and produces at the profit-maximizing level of output, which of the following is true? A firm will:
A. plan to exit the industry in the long run if price falls below $15.
B. continue to operate in the short run if price is below $11.
C. make positive profits any time the price is greater than $11.
D. will earn maximum profits at a quantity of 35.
A. plan to exit the industry in the long run if price falls below $15.
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The marginal revenue curve for a single-price monopoly
A) is horizontal. B) is upward sloping. C) lies above the market demand curve. D) lies below the market demand curve.
If the aggregate price level at time t is denoted by Pt, the inflation rate from time t - 1 to t is defined as
A) ?t = (Pt - Pt - 1)/Pt - 1. B) ?t = (Pt + 1 - Pt - 1)/Pt - 1. C) ?t = (Pt + 1 - Pt )/Pt. D) ?t = (Pt - Pt - 1)/Pt.
If polluters are forced to pay for their pollution, they will reduce pollution toward a socially optimal amount
a. True b. False Indicate whether the statement is true or false
Refer to the scenario above. Suppose besides consuming all the potatoes grown on his farm, Edwin buys 5 pounds of potatoes at $0.80 per pound. What is likely to happen in this case?
A) GDP will increase by $4. B) GDP will remain unchanged. C) GDP will decrease by $0.80. D) Trade surplus will increase by $4.