In reference to the long-run firm competitive equilibrium diagram, which of the following statements is INCORRECT?
A. In the long run, the firm has no incentive to alter its scale of operations.
B. In the long run, the firm operates where price, marginal revenue, marginal cost, short-run minimum average cost, and long-run minimum average cost all are equal.
C. Because profits must be zero in the long run, the firm's short-run average costs (SAC) must equal P at Qe, which occurs at minimum SAC.
D. In the long run, this firm must be part of a constant-cost industry, because its marginal revenue curve is perfectly elastic.
Answer: D
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Price discrimination only occurs under monopoly.
Answer the following statement true (T) or false (F)
The above figure shows the apartment rental market in Bigtown. At what rent will there be neither a shortage nor a surplus of apartments?
A) $1250 per month B) $1000 per month C) $750 per month D) $500 per month
Exemptions are better off for the taxpayer than deductions _____
a. only in the case of housing-related tax preferences b. when itemizing deductions c. when taking the standard deduction d. for high-income taxpayers
The opportunity cost of capital is
A) the rate of return realized on an investment. B) the rate of return that could be earned by the owner's capital were it used elsewhere. C) the rate used to calculate a firm's tax liability. D) the rate of interest the government uses to calculate legal business tax penalties.