Answer the following questions true (T) or false (F)
1. If the market price is at equilibrium, the deadweight loss is zero.
2. Deadweight loss refers to a loss in revenue resulting from producers having to reduce their selling price to remain competitive.
3. Equilibrium in a competitive market results in the greatest amount of economic surplus from the production of a good or service.
1. TRUE
2. FALSE
3. TRUE
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If the money wage rate is constant and the price level increases, what happens to the real wage rate, firms' profits, and the aggregate quantity supplied?
What will be an ideal response?
The IS curve shows that higher income levels require ________ interest rates to ensure that income equals ________
A) higher, planned autonomous spending B) higher, planned expenditures C) lower, planned autonomous spending D) lower, planned expenditures
The U.S. labor movement started
A) with local craft unions composed of workers who engaged in a particular trade or skill, such as baking, carpentry or plumbing. B) during the Civil War. C) after World War I. D) with the Knights of Labor, an organized group of both skilled and unskilled workers.
If MR>MC, then the firm should
a. increase production b. decrease production c. keep the prices constant d. keep the production level constant