As in all other competitive markets price equals marginal cost in a market for a scarce, non-renewable resource that is traded in a competitive market
Indicate whether the statement is true or false
False. Price exceeds marginal cost in those markets because owners of those resources receive a rent. It is a compensation for the ownership of this scarce resource.
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Marginal cost is the opportunity cost of producing
A) every unit possible. B) zero units. C) the first unit and only the first unit. D) one more unit of a good or service. E) None of the above answers is correct.
Consider a two-way network with 1,000 users. Adding one additional user to such a network benefits all users by adding:
A. 999,000 potential connections to the network. B. 999 potential connections to the network. C. 1,000 potential connections to the network. D. 2,000 potential connections to the network.
The concept of diminishing marginal rate of substitution indicates that
A) as the consumption of good X increases, individuals are willing to give up an increasing amount of good Y in order to obtain one more unit of good X. B) as the consumption of good X increases, individuals are willing to give up a decreasing amount of good Y in order to obtain one more unit of good X. C) along an indifference curve, a consumer prefers the consumption combinations moving to the northwest along the curve. D) None of the above answers is correct.
Discuss the correct and incorrect economic analysis in the following statements
"If a disease kills a large number of turkeys, the supply of turkeys will decrease. This will result in a price increase, which will then cause the supply of turkeys to increase."