A firm is generating detrimental externalities when
a. MSC is less than MPC.
b. MSC is the same as MPC.
c. MSC is greater than MPC.
d. MPC includes some incidental costs.
c
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Total revenue decreases as the price of a good increases, if the demand for the good is
A. unitary elastic. B. elastic. C. inelastic. D. perfectly elastic.
A stronger U.S. dollar in world exchange markets means that
A) foreigners sell the dollars that they have. B) a dollar buys more units of foreign currency than it could before. C) a dollar buys less units of foreign currency than it could before. D) a dollar buys the same amount of foreign currency than it could before, with gold backing up the value of the dollar.
Suppose the firms in a monopolistically competitive market are incurring economic losses. What will happen to move the market to its long-run equilibrium?
A) More close substitutes will appear in the market until economic profits are zero. B) The firms that dropped out of the market will reenter once the level of economic losses is zero. C) Firms will continue to exit the market until economic losses are equal to zero. D) The demand functions of all the firms remaining in the market will become relatively more elastic.
Which of the following events must cause equilibrium price to fall?
a. demand increases and supply decreases b. demand and supply both decrease c. demand decreases and supply increases d. demand and supply both increase