A colluding oligopoly will face market demand and produce up until the point at which
A. P = MR = MC.
B. P < MR > MC.
C. P > MR = MC.
D. P < MR = MC.
Answer: C
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The above figure shows Bobby's indifference map for juice and snacks. Also shown are three budget lines resulting from different prices for snacks. Bobby views snacks as a(n)
A) normal good. B) inferior good. C) Giffen good. D) Not enough information.
When there are economies of scale in production:
a. long-run average total cost declines as output expands b. long-run average total cost increases as output expands. c. marginal cost increases as output expands. d. the marginal product of an input diminishes with increased utilization.
If the demand for a product increases as the result of a decline in income, it can be concluded that the
a. product is an inferior good. b. demand for the product is inelastic. c. price elasticity of demand for the product equals unity. d. demand for the product is elastic.
If price is below average variable costs at all rates of output, the quantity supplied by a perfectly competitive firm will equal
A) zero. B) the rate of output where price equals marginal cost. C) the rate of output associated with the break-even point. D) the rate of output where marginal revenue equals average fixed costs.