A perfectly competitive firm earns a profit when price is
A) equal to minimum average total cost.
B) above minimum average total cost.
C) equal to minimum average variable cost.
D) equal to minimum average fixed cost.
Answer: B
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Refer to Table 2-25. This table shows the number of labor hours required to produce a motorcycle and a guitar in Ireland and Scotland
a. Which country has an absolute advantage in the production of motorcycles? b. Which country has an absolute advantage in the production of guitars? c. What is Ireland's opportunity cost of producing one motorcycle? d. What is Scotland's opportunity cost of producing one motorcycle? e. What is Ireland's opportunity cost of producing one guitar? f. What is Scotland's opportunity cost of producing one guitar? g. If each country specializes in the production of the product in which it has a comparative advantage, which country should produce motorcycles? h. If each country specializes in the production of the product in which it has a comparative advantage, which country should produce guitars?
England's American colonies were ultimately more successful than the colonies of other European powers. The reasons for this success include:
a. the realization that successful colonies would provide markets for English goods. b. a focus on establishing permanent settlements. c. the access to land which could be privately owned. d. all of the above.
Horizontal mergers would most likely cause the
a. merged firm to engage in cartel behavior b. market power of the merged firm to be considerably less than the market power held by both firms before the merger c. stock value of the two firms to increase d. formerly perfectly competitive firms to become oligopolistic e. industry's concentration ratio to increase
Diminishing marginal productivity implies decreasing total product
a. True b. False Indicate whether the statement is true or false