Perfectly competitive firms cannot individually affect market price because
A. Demand is perfectly inelastic for their goods.
B. There are many firms, none of which has a significant share of total output.
C. The government exercises control over the market power of competitive firms.
D. There is an infinite demand for their goods.
Answer: B
You might also like to view...
The intersection of the aggregate demand and the aggregate supply curve defines the equilibrium level of _____ and the price level
a. real interest rate b. nominal interest rate c. nominal GDP d. real GDP e. unemployment
Assuming that resources are specialized, the opportunity cost of an item increases as production of it rises. Therefore, we expect that firms will produce more if
a. the price increases. b. the price decreases. c. the opportunity cost is greater than the price. d. government asks firms to produce more. e. the income of buyers increases.
In the circular-flow diagram, which of the following items represents a payment for a factor of production?
a. interest b. capital c. spending by households on goods d. spending by households on services
Efficient solutions to solving externality problems:
A. decrease surplus for everyone in society. B. are not always supported in political arenas. C. are always supported by the government. D. increase surplus for everyone in society.