Suppose there are no recurring fixed costs and the daily production process for all identical firms in a perfectly competitive industry has decreasing returns to scale throughout. Then each firm will only produce a single good each day when the industry is in long run equilibrium.
Answer the following statement true (T) or false (F)
True
Rationale: In this case, the MC curve is upward sloping throughout -- and starts where the AC curve starts. This implies that the lowest point of the AC curve is at output 1 -- which is where each firm produces in long run equilibrium.
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With respect to monopolies, deadweight loss refers to the
A) socially unproductive amounts of money spent to obtain or acquire a monopoly. B) net loss in consumer and producer surplus due to a monopolist's pricing strategy/policy. C) lost consumer surplus from monopolistic pricing. D) none of the above
Refer to the table below. Suppose the perfectly competitive market for dairy products had a 40 percent chance of a high price of $3.00 and a 60 percent chance of a low price of $2.00. However, both Happy Cows and Free Cows have revised their probabilities and now believe that the probability of a high price of $3.00 is 80 percent and the probability of a low price of $2.00 is 20 percent. If the
managers of Happy Cows want to maximize expected profit based on the new probabilities by how much will they change the quantity produced?
Happy Cows and Free Cows are two separate perfectly competitive dairy farms. The table above shows the respective firms' marginal cost at various production levels.
A) Happy Cows will decrease their production by 20 units.
B) Happy Cows will decrease their production by 40 units.
C) Happy Cows will increase their production by 40 units.
D) Happy Cows will increase their production by 20 units.
We depart from the assumptions of classical economics when we focus on the relationship between the quantity of output and the ________ level.
a) unemployment b) price c) real GDP d) retail sales
What is the type of companies that provide services by linking individuals to others with similar interests or to companies that sell certain products?
A) not-for-profit firms B) government agencies C) platform firms D) non-transaction firms