A competitive firm has been selling its output for $10 per unit and has been maximizing its profit. Then, the price rises to $14, and the firm makes whatever adjustments are necessary to maximize its profit at the now-higher price. Once the firm has adjusted, its
a. marginal revenue is lower than it was previously.
b. marginal cost is lower than it was previously.
c. quantity of output is higher than it was previously.
d. All of the above are correct.
c
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A sometimes short, sometimes extended period of declining output and living standards is referred to as a recession.
Florida State University has just lowered the price of its season football tickets from $350.00 to $300.00. As a result, there was an increase in the number of season tickets purchased from 43,000 to 47,000
The price elasticity of demand for season tickets equals A) 1.71. B) 1.58. C) 0.71. D) 0.58.
All solutions to market failures in markets for public goods or common resources:
A. try to force the internalization of externalities. B. must be provided by the government. C. are not perfect, and total surplus cannot be maximized in these markets. D. need to be accepted by the affected parties to be effective.
A competitive market is in long-run equilibrium. If demand increases, we can be certain that price will
a. rise in the short run. Some firms will enter the industry. Price will then rise to reach the new long-run equilibrium. b. rise in the short run. Some firms will enter the industry. Price will then fall to reach the new long-run equilibrium. c. fall in the short run. All, some, or no firms will shut down, and some of them will exit the industry. Price will then rise to reach the new long-run equilibrium. d. not rise in the short run because firms will enter to maintain the price.