Suppose ABC Dairy is one firm competing in the perfectly competitive market for milk. Now suppose ABC Dairy decides to produce only organic milk. Which of the following best describes the effects of this change in the market?
A. ABC Dairy is differentiating its product and will likely be able to charge a higher price than before.
B. ABC Dairy will still be a price taker because it is still operating in a perfectly competitive market.
C. ABC Dairy will have a monopoly on organic milk due to very high entry barriers.
D. The other dairy firms will produce with excess capacity, but ABC Dairy will be efficient.
Answer: A
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A. utility to consumers B. cost of production C. market price D. contribution to corporate profits
Use the information in the following table to answer the next question.(1) Interest Rate(2) Investment (billions of dollars)(3) Investment (billions of dollars)4%$100$8059070680607705086040In the table, investment is in billions. Suppose the Fed reduces the interest rate from 6% to 5% at a time when the investment demand declines from that shown by column (2) to that shown by column (3). As a result of these two occurrences, investment will ________.
A. increase by $20 billion B. increase by $10 billion C. decrease by $20 billion D. decrease by $10 billion
The poorer a country is the:
A. more difficult it is to pay for things that will bring it out of poverty. B. less they have to give up for the basic things that will bring them out of poverty. C. easier it is to pay for things that will bring it out of poverty. D. more they can invest in all the components of productivity at once.
The price where quantity demanded is equal to quantity supplied is known as
a. equilibrium price. b. equilibrium quantity. c. equilibrium rate. d. equilibrium level.