In a perfectly competitive market, if all firms face identical, constant marginal cost curves, then consumer surplus is
A) the area beneath the market demand curve and above the market clearing price.
B) the area above the market demand curve and above the market clearing price.
C) the total area beneath the market demand curve.
D) definitely zero.
Answer: A
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Starting from long-run equilibrium, a decrease in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. higher; potential D. lower; higher
Classical economists suggest that unemployment is a short-lived phenomenon because
A) wages adjust quickly to equilibrate quantity of labor demanded with quantity of labor supplied. B) wages remain unchanged when the quantity of labor demanded exceeds the quantity of labor supplied. C) wages remain unchanged when the quantity of labor supplied exceeds the quantity of labor demanded. D) wages tend to rise slowly when the quantity of labor demanded equals the quantity of labor supplied.
Which of the following is a function of the headquarters of an M-form organization?
a. To take all decisions relating to the functioning of the various divisions. b. To measure and compare the performance of the different divisions. c. To solve the problems faced at lower levels of its different divisions. d. To ensure that all divisions work harmoniously with each other.
When compared to monopoly and monopolistic competition, the perfectly competitive market structure
a. has somewhat higher barriers to entry b. produces the lowest output at the lowest prices c. is the least efficient d. gives the greatest output at the lowest prices e. earns the highest normal profit