In the short run, a perfectly competitive firm calculates the profit-maximizing (or loss-minimizing) production output by equating:
A) price and average variable cost.
B) price and average total cost.
C) price and marginal revenue.
D) marginal revenue and marginal cost.
Answer: D) marginal revenue and marginal cost.
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The problem created by asymmetric information before the transaction occurs is called ________, while the problem created after the transaction occurs is called ________
A) adverse selection; moral hazard B) moral hazard; adverse selection C) costly state verification; free-riding D) free-riding; costly state verification
Suppose Y = 100, P = 80, and V = 3.2. If Y rises to 105, and the inflation rate is 10 percent, what is the new value of M?
What will be an ideal response?
Straight Cut beauty salon merges with Clean-Cut beauty salon. This is an example of
A) conglomerate merger. B) concentration ratio. C) vertical merger. D) horizontal merger.
Concerning auctions, what is the definition of a "common-values setting"?
a. Bids are submitted using open outcries. b. Bids are submitted simultaneously, and the highest is selected as the winner. c. Bidders value the object the same, but are uncertain as to what that value is. d. Bids are submitted by syndicates of cooperating bidders.