If demand is perfectly elastic, the demand curve is horizontal, and the price elasticity of demand equals 1
a. True
b. False
Indicate whether the statement is true or false
False
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The perfectly competitive widget industry is in long-run equilibrium. A profit-maximizing manufacturer receives total revenue of $55,000. He uses his labor, $15,000 worth of wire, and $15,000 worth of steel to make the widgets. The manufacturer
A. is earning an economic profit of $25,000. B. must have an opportunity cost of labor of less than $25,000. C. must have an opportunity cost of labor of exactly $25,000. D. must have an opportunity cost of labor of more than $25,000.
If the United States imposed higher tariffs and more restrictive quotas that reduced imports,
A) employment in the U.S. would be higher. B) the U.S. would not gain at the cause expense to other countries. C) the U.S. would gain at the expense of other countries. D) the wage rates of U.S. workers would be higher.
Monopolistically competitive firms try to ______ because P ? MC.
a. reduce customer expectations b. reduce customer demand c. keep the same number of customers d. attract more customers
When a firm establishes a long-term contract with another firm, whereby the first firm grants the second independent business the rights to use the former's name, reputation and business format, it is referred to as a:
A. lease contract. B. joint venture. C. franchise agreement. D. standard supply contract.