A situation in which the price charged is greater than society's opportunity cost would lead to
A) market failure.
B) marginal monopoly pricing.
C) marginal profits.
D) marginal cost pricing.
Answer: A
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If a firm has determined its optimal output level, where MR = MC, then price
A. is unchanged. B. is set by statistical analysis of the market. C. is equal to MC. D. is determined by the market demand at that output.
A monopolistically competitive firm
a. tries to differentiate its product from competitors' products. b. faces a perfectly elastic demand curve for its product. c. has more monopoly power in the long run than does a perfectly competitive firm. d. is always a retail establishment.
The law of demand is simply a reflection of the
a. work of Alfred Marshall who formulated the law. b. basic principle of economics: Incentives influence behavior in a predictable fashion. c. production possibilities curve. d. law of comparative advantage.
There is a trade-off between unemployment and inflation when the aggregate
A. Supply curve is upward-sloping. B. Supply curve is vertical. C. Demand curve is upward-sloping. D. Supply curve is downward-sloping.