In which market structure do firms exist in very large numbers, each firm produces an identical product, and there is freedom of entry and exit?
A) monopoly
B) oligopoly
C) only perfect competition
D) only monopolistic competition
E) both perfect competition and monopolistic competition
C
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The price of salsa rises. How does the increase in the price of salsa affect the supply of salsa?
A) The supply of salsa increases. B) The supply of salsa decreases. C) There is no change to either the supply of salsa or the quantity of salsa supplied. D) There is no change to the supply of salsa, but the quantity of salsa supplied increases. E) There is no change to the supply of salsa, but the quantity of salsa supplied decreases.
A monopolist has total cost TC = Q2 + 10Q + 100 and marginal cost MC = 2Q + 10 . It faces demand Q = 130- P (so its marginal revenue is MR = 130 - 2Q). Its profit-maximizing output
a. 30 b. 25 c. 20 d. 10
If a profit-maximizing firm in a competitive market discovers that, at its current level of production, price is greater than marginal cost, it should
a. shut down. b. reduce its output but continue operating. c. continue to produce at the current levels. d. increase its output.
What is the benefit of a high saving rate?