For which market structure do economists have the least precise model of price determination?
A. oligopoly
B. perfect competition in the short run
C. perfect competition in the long run
D. monopoly
Answer: A
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Which of the following is a characteristic of a single-price monopoly?
A) The firm is a price taker. B) Demand is perfectly elastic. C) There are many close substitutes for the firm's product. D) The market price exceeds marginal revenue.
Refer to the figure above. A tariff of ________ would be purely protective
A) $0 B) $5 C) $8 D) $10
If average total cost > average variable cost > price, a profit-maximizing firm in a perfectly competitive market should:
A. continue to produce its current output level. B. shut down in the short run. C. increase its output level to minimize its loss. D. None of these
Trade that is within a country or between countries is based on the principle of
A) absolute advantage. B) scarcity. C) competition. D) comparative advantage.