The marginal cost of a good is
a. lower for competitive firms than for monopolists.
b. the cost of an additional unit.
c. equal to fixed cost at high output levels.
d. equal to variable cost when the firm is maximizing profit.
B
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As the number of firms in an oligopolistic market increases, ________
A) prices tend to decline toward marginal cost B) prices tend to rise above marginal cost C) the market demand for the good tends to fall D) profits earned by firms tend to rise
When real GDP is ________ potential GDP, the unemployment rate is ________ the natural unemployment rate
A) greater than; less than B) less than; equal to C) equal to; greater than D) greater than; greater than
The price elasticity of new automobile purchases is about 1.2. This implies that an increase of $1,000 on a $10,000 automobile will
A. reduce the number of autos sold by approximately 1.2 percent. B. increase the consumer expenditures on autos by approximately 1.2 percent. C. reduce the number of autos sold by approximately 12 percent. D. increase consumer expenditures on autos by approximately 12 percent.
Consumer surplus is the cumulative difference between:
A. consumers' incomes and consumers' expenditures. B. the suggested retail price and the price consumers actually pay. C. the amount consumers are willing to pay and the price they actually pay. D. consumers' savings and consumers' expenditures.