The demand curve for a perfectly competitive firm is
A) elastic at relatively high prices and inelastic at relatively low prices.
B) perfectly elastic.
C) perfectly inelastic.
D) unitary elastic.
Answer: B
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When the labor market is in equilibrium, real GDP ________ potential GDP
A) is greater than B) is equal to C) is less than D) might be greater than, less than, or equal to E) is not comparable to
The above figures show the market for oranges. Which figure(s) shows the effect of an increase in the price of bananas, a substitute for oranges?
A) Figure A B) Figure C C) Figure D D) Figure A and C
If a firm increases its output and finds that its average total cost decreases as a result, this implies that
a. marginal cost exceeds average total cost. b. the cost of producing an additional unit of output is more than the average total cost. c. average fixed cost is increasing. d. average total cost exceeds marginal cost.
Market failure associated with the free-rider problem is a result of
a. a problem associated with pollution. b. benefits that accrue to those who don't pay. c. losses that accrue to providers of the product. d. market power.