If the demand curve facing a firm is perfectly elastic, then:
A. it can increase its total revenue by lowering the price of its product.
B. its marginal revenue will equal price.
C. its marginal revenue schedule decreases twice as fast as the demand curve.
D. its marginal revenue schedule will decrease at an increasing rate.
Answer: B
You might also like to view...
The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; A B. recessionary; C C. recessionary; B D. expansionary; A
In an unregulated market for healthcare, there is
A) a deadweight loss from over-providing healthcare. B) a deadweight loss from under-providing healthcare. C) no deadweight loss. D) Any of the above could be correcting depending on how the marginal cost paid by producers compares to the marginal social cost.
A bank's net interest margin can be adversely affected by all of the following except
A) credit risk. B) interest rate risk. C) leverage risk. D) stock market risk.
If Ben becomes less likely to buy smoke detectors after he has fire insurance, he is illustrating
A) moral hazard. B) adverse selection. C) the lemon problem. D) the free rider problem.