The short-run supply curve for the perfectly competitive firm is the portion of its
A) MC curve above the AVC curve.
B) MC curve above the AFC curve.
C) MC curve above the ATC curve.
D) MC curve above the MR curve.
Answer: A
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Long-run macroeconomic equilibrium occurs when aggregate demand ________ short-run aggregate supply and they ________ the long-run supply curve
A) is greater than; intersect at a point to the left of B) equals; intersect at a point on C) equals; intersect at a point to the right of D) is less than; intersect at a point to the right of
Negative correlation between x and y implies that
A) when x is high, y is high. B) when x is high, y is low. C) xy < 0. D) x/y < 0.
The market demand function for wheat is Qd = 10 - 2P and the market supply function is Qs = 4P - 2, both measured in billions of bushels per year. Suppose the government wants to increase the price of wheat to $3/bushel and they impose a voluntary production reduction program to achieve their goal. How much would the government have to pay farmers?
A. $1.5 billion B. $3 billion C. $4.5 billion D. $18 billion
Managers in oligopoly firms must
A) eliminate any barriers to entry if they hope to make short-run profits. B) advertise heavily in order to differentiate their product. C) anticipate the reaction of rival firms. D) establish many varieties of their products to cover the spectrum of consumer tastes.