In a contestable market,
A. There are economies of scale that heighten competition.
B. An imperfectly competitive industry does not face any potential competition when profits increase.
C. Many firms compete in producing a standardized product.
D. Barriers to entry and long-run economic profits are low.
Answer: D
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The percentage markups which sellers use
A) are based on their estimates or guesses about marginal cost and marginal revenue for particular goods. B) are between 10 and 15 percent. C) are the same on all products of a single firm. D) differ between products but are the same on average for all firms.
The primary objective of a cartel is to:
A) maximize the amount of profit received by each member of the organization. B) maximize the joint profits of the members of the organization. C) ensure each member of the organization some minimum amount of profit. D) maximize the average profits of the members of the organization.
When demand is perfectly elastic, marginal revenue is
A) zero. B) equal to price. C) declining. D) increasing.
The increase in a firm's total revenues resulting from hiring an additional unit of labor is known as the marginal:
a. product. b. revenue product. c. cost. d. none of these.