When a producer's demand curve is a horizontal straight line, we know that
a. market demand is horizontal as well
b. there is considerable brand loyalty for the producer's good
c. the producer is a monopolist
d. the producer has significant market share
e. the producer is in a perfectly competitive industry
E
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In the long run, new firms enter a perfectly competitive market when
A) normal profit is greater than zero. B) economic profit is equal to zero. C) normal profit is equal to zero. D) economic profit is greater than zero. E) the existing firms are weak because they are incurring economic losses.
In response to the destructive bank panics of the Great Depression, future bank panics are designed to be prevented by
A) establishing a fractional reserve system of banking. B) increasing the required reserve ratio to 100%. C) the establishment of the Federal Deposit Insurance Corporation. D) the Federal Reserve System conducting open market operations. E) the Federal Reserve System acting as a lender of last resort.
You have two career options. You can work for someone else for $50,000 a year, or, you can run your own business, with an annual revenue of $100,000, and explicit costs of $40,000 annually
Explain which career option a profit-maximizer would select and why.
Since countries differ in the amount of economic activity that is transacted in organized markets,
a. some countries are more productive than others. b. persons live better in some countries than others. c. international comparisons of per capita GDP are often misleading. d. comparisons between countries are totally impossible.